[Senate Hearing 108-440]
[From the U.S. Government Publishing Office]


                                                 S. Hrg. 108-440, Pt. 2
 
DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
                                  2005

=======================================================================

                                HEARING

                               before the

                      COMMITTEE ON ARMED SERVICES
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                                   ON

                                S. 2400

     TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2005 FOR MILITARY 
ACTIVITIES OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND 
   FOR DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE 
PERSONNEL STRENGTHS FOR SUCH FISCAL YEAR FOR THE ARMED FORCES, AND FOR 
                             OTHER PURPOSES

                               __________

                                 PART 2

                                SEAPOWER

                               __________

                          MARCH 3 AND 10, 2004


         Printed for the use of the Committee on Armed Services

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                      COMMITTEE ON ARMED SERVICES

                    JOHN WARNER, Virginia, Chairman

JOHN McCAIN, Arizona                 CARL LEVIN, Michigan
JAMES M. INHOFE, Oklahoma            EDWARD M. KENNEDY, Massachusetts
PAT ROBERTS, Kansas                  ROBERT C. BYRD, West Virginia
WAYNE ALLARD, Colorado               JOSEPH I. LIEBERMAN, Connecticut
JEFF SESSIONS, Alabama               JACK REED, Rhode Island
SUSAN M. COLLINS, Maine              DANIEL K. AKAKA, Hawaii
JOHN ENSIGN, Nevada                  BILL NELSON, Florida
JAMES M. TALENT, Missouri            E. BENJAMIN NELSON, Nebraska
SAXBY CHAMBLISS, Georgia             MARK DAYTON, Minnesota
LINDSEY O. GRAHAM, South Carolina    EVAN BAYH, Indiana
ELIZABETH DOLE, North Carolina       HILLARY RODHAM CLINTON, New York
JOHN CORNYN, Texas                   MARK PRYOR, Arkansas

                    Judith A. Ansley, Staff Director

             Richard D. DeBobes, Democratic Staff Director

                                 ______

                        Subcommittee on Seapower

                  JAMES M. TALENT, Missouri, Chairman

JOHN McCAIN, Arizona                 EDWARD M. KENNEDY, Massachusetts
SUSAN M. COLLINS, Maine              JOSEPH I. LIEBERMAN, Connecticut
LINDSEY O. GRAHAM, South Carolina    JACK REED, Rhode Island

                                  (ii)

















                            C O N T E N T S

                              ----------                              

                    CHRONOLOGICAL LIST OF WITNESSES
       Future Navy and Marine Corps Capabilities and Requirements
                             march 3, 2004

                                                                   Page

Young, Hon. John J., Jr., Assistant Secretary of the Navy for 
  Research, Development, and Acquisition; Accompanied by Vice 
  Adm. John B. Nathman, USN, Deputy Chief of Naval Operations for 
  Warfare Requirements and Programs; Vice Adm. J. Cutler Dawson, 
  Jr., USN, Deputy Chief of Naval Operations for Resources, 
  Requirements, and Assessments; Lt. Gen. Robert Magnus, USMC, 
  Deputy Commandant for Programs and Resources, Headquarters; and 
  Lt. Gen. Edward Hanlon, Jr., USMC, Commanding General, Combat 
  Development Command............................................     5

             The Posture of the U.S. Transportation Command
                             march 10, 2004

Handy, Gen. John W., USAF, Commander, U.S. Transportation 
  Command; Accompanied by Major Gen. Ann E. Dunwoody, USA, 
  Commander, Surface Deployment and Distribution Command; and 
  Vice Adm. David L. Brewer, USN, Commander, Military Sealift 
  Command........................................................    43

                                 (iii)


DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
                                  2005

                              ----------                              


                        WEDNESDAY, MARCH 3, 2004

                               U.S. Senate,
                          Subcommittee on Seapower,
                               Committee on Armed Services,
                                                    Washington, DC.

       FUTURE NAVY AND MARINE CORPS CAPABILITIES AND REQUIREMENTS

    The subcommittee met, pursuant to notice, at 2:01 p.m. in 
room SR-232A, Russell Senate Office Building, Senator James M. 
Talent (chairman of the subcommittee) presiding.
    Committee members present: Senators Talent, Collins, and 
Kennedy.
    Committee staff member present: Leah C. Brewer, nominations 
and hearing clerk.
    Majority staff members present: Ambrose R. Hock, 
professional staff member; and Thomas L. MacKenzie, 
professional staff member.
    Minority staff member present: Creighton Greene, 
professional staff member.
    Staff assistants present: Sara R. Mareno and Pendred K. 
Wilson.
    Committee members' assistants present: Derek J. Maurer, 
assistant to Senator Collins; Lindsey R. Neas, assistant to 
Senator Talent; and Mieke Y. Eoyang, assistant to Senator 
Kennedy.

     OPENING STATEMENT OF SENATOR JAMES M. TALENT, CHAIRMAN

    Senator Talent. Senator Kennedy is on his way and asked 
that we go ahead. When he comes, of course, he can give his 
opening statement.
    I'll go ahead and convene the hearing of the Seapower 
Subcommittee of the Senate Armed Services Committee. I 
understand we have one joint statement, which Secretary Young, 
you're going to give that?
    Mr. Young. I will make an oral statement and we have one 
combined written statement for the record, Senator Talent.
    Senator Talent. Okay. That's right, you mentioned that 
yesterday to me. You're going to do an oral statement and then 
we'll just put the written statement in the record without 
objection.
    I'll go ahead and give my opening statement and then I'll 
introduce everybody all at once, since you're not individually 
going to make opening statements.
    Today the Seapower Subcommittee welcomes the distinguished 
panel of witnesses representing the Department of the Navy for 
the purpose of translating how requirements traditionally based 
on a qualitative and quantitative threat are now being based on 
capabilities that proposed systems bring to the naval force. 
While this process intuitively can maintain capabilities 
against what many may consider a diminished threat, it can also 
greatly widen the range of capabilities that are considered 
necessary, especially in this current environment where the 
threat is less well defined in the areas of capabilities, 
quantities and perhaps most importantly motive. With potential 
enemies who are not necessarily aligned with a particular 
nation-state, our Armed Forces are tasked with bringing 
capabilities to bear to defeat these enemies anywhere, any 
time.
    Perhaps the first question that needs to be addressed is 
the size of the force. How many ships, aircraft, and ground 
forces are necessary for the Navy and Marine Corps to bring 
their capabilities to bear? What process is being used to 
define the capabilities of these ships, aircraft, and ground 
forces? How does the new Fleet Response Plan, with its 
objective of presence with a purpose, provide the Nation with 
assured presence at the right place at the right time? These 
are some of the questions we would like the witnesses to 
address today.
    Traditionally, analytic models and methods have been used 
to define and refine requirements using engagement mission and 
campaign level models. These models replicate the platforms, 
sensors, weapons, and tactics of well-defined threats. If the 
threat is no longer well-defined, however, what changes to 
these analytic processes are required to define the 
capabilities we seek to achieve in our new developmental and 
procurement systems?
    The United States is highly dependent on its maritime 
strength, and one other area of concern is the health of our 
shipbuilding industrial base. If we were to lose the industrial 
capacity to maintain a fleet suitable to guarantee presence 
throughout the world it would be impossible to regenerate the 
necessary industrial capacity for at least a decade.
    I want to thank Senator Kennedy for his steadfast 
leadership on this subcommittee. I know he is interested in 
these subjects as well as how they effect particular programs 
and platforms. For years as both Chairman and ranking member, 
he has led in advancing the maritime strength of America.
    I will go ahead and introduce the witnesses and then when 
Senator Kennedy comes, we can just interrupt and let him give 
us his opening statement.
    Our witnesses are the Honorable John Young, Jr., the 
Assistant Secretary of the Navy for Research, Development and 
Acquisition. Mr. Secretary, thank you for coming today. I've 
appreciated our conversations on this subject as well.
    Vice Admiral John Nathman, who is the Deputy Chief of Naval 
Operations for Warfare Requirements and Programs. Vice Admiral 
Cutler Dawson, who is the Deputy Chief of Naval Operations for 
Resources, Requirements and Assessments. Lieutenant General Bob 
Magnus, the Deputy Commandant for Programs and Resources with 
the Marine Corps. General Ed Hanlon, who is the Commanding 
General of the Combat Development Command of the Marine Corps. 
Thank you all for being here.
    While Senator Kennedy gets his opening statement ready, I 
think it is very important for us to do our oversight properly. 
For us to know what analytic processes and models you are using 
in determining the kind of capabilities that you want the Navy 
and the Marine Corps to have. If we are going to gradually or 
otherwise evolve away from a numbers-based type method for 
estimating what kind of naval strength we require, well then we 
need to know what processes are being used so we can do our 
oversight. Have the assurance that you all are moving according 
to a plan that we can measure, so that we can do our job.
    That's really what this hearing is about. I'm sure we will 
get into some individual programs and platforms as well. I know 
that I intend to and I imagine Senator Kennedy intends to as 
well.
    Senator Kennedy, I said some very nice things about you 
before you got here----
    Senator Kennedy. Oh, did you?
    Senator Talent.--but it's in the record. [Laughter.]
    Senator Kennedy. They're in the record, or do you want to 
say them again?
    Senator Talent. Absolutely. [Laughter.]
    I certainly appreciate how much you have done over the 
years to advance naval strength and naval power and to fulfill 
our functions as a committee and as a Congress. I'm pleased to 
have you give your opening statement, for the record.

             STATEMENT OF SENATOR EDWARD M. KENNEDY

    Senator Kennedy. Well, thank you very much, Mr. Chairman 
and my colleague Senator Collins. There are many areas of 
difference on Capitol Hill, but I think in this subcommittee we 
have a remarkable comity and working partnership in not only 
this committee, but I think with the armed services. I thank 
you very much for your leadership and also the ability to work 
with you. We worked together in the conference on a variety of 
different issues. Certainly as the chairman you have developed 
an extraordinary command and understanding of these needs that 
we have in our force projection. I want to thank you for all of 
your courtesies and the chance to work with you and a warm 
friend, Senator Collins, a member of this subcommittee.
    I want to welcome all of our representatives of the 
Service. Once again, to indicate to them we never can do it 
enough, how much we are grateful to them and their leadership 
and the men and women they represent.
    We are always mindful of those that have given their lives; 
we are up to 13 now in Massachusetts. I've had the opportunity 
to attend some of the funerals and wakes of extraordinary young 
men and women with extraordinary families.
    I also had the chance to go out to Walter Reed Hospital on 
a couple of different occasions and visit those brave 
individuals who are the casualties and see both the 
extraordinary personal courage of those individuals and their 
incredible desire, to the extent possible, to remain in the 
Service, rejoining their units. I mean it's an absolutely 
inspirational kind of circumstance. A great tribute, I think, 
to the way that they're being led and the value that the 
Services are giving to those individuals. They always have ways 
of trying to deal with some of the kinds of questions--and I 
might submit some questions on this.
    One of the perplexing issues of those that we've had, the 
boys that have been killed in Massachusetts, is the difficulty 
in recovering their wills. All of them are required to fill out 
their will when they go into the Service. None of the families 
have been able to recover them. This is an aspect of closure 
for families. I mean these are the kinds of incidental things--
we probably won't get into today. But there are some of these 
individual kinds of issues that are perplexing families and 
they have been raised with me. They're not the particular 
subject of this hearing, but I think it's useful to hear at 
least some of these concerns. I'll follow-up with you, the 
Members, the leaders, and the commanders on those issues.
    I want to say that we meet this afternoon on Navy and 
Marine Corps future operational capabilities and requirements. 
Some may put the primary emphasis on the ships or aircraft; we 
should pay attention an important matter of ensuring 
capabilities to support the national security strategy. In the 
world that we live, which continues to be one of uncertainty 
and unrest, the decisions we make this year have direct effect 
on the forces and capabilities that future combat commanders 
will use to protect our interest.
    Without adequate modernization we could be faced with a 
situation, that would be forces without the necessary 
capabilities. We could be in a position of trying to support 
theater combatant commanders' requirements with forces that 
either too small or lacking in capability to meet their needs. 
We all know that our men and women in the Armed Forces will 
respond admirably in any crisis, as they've been doing to 
support the operation in Afghanistan and in Iraq. This leads us 
to the subject of today's hearings, the future Navy and Marine 
Corps.
    The subcommittee must ensure that we are all getting the 
most from our investments. We owe it to the taxpayer, but more 
importantly, to the sailors and marines. Over the long term we 
cannot count on the unceasing heroic performance from sailors 
and marines to make up for inadequate or inappropriate 
investment. We may have to change our approaches in some areas, 
but we will still need to ensure that we do not lose the very 
real advantages that our Navy and Marine Corps so skillfully 
provide, as evidenced by their outstanding performance in 
Operation Enduring Freedom (OEF) and Operation Iraqi Freedom 
(OIF).
    So, I thank you, Mr. Chairman. I look forward to the 
testimony.
    Senator Talent. I thank the Senator. Senator Collins, do 
you have an opening statement?
    Senator Collins. Thank you very much, Mr. Chairman.
    First, let me salute you and Senator Kennedy for your 
strong support of our Navy and for the commitment that you've 
given to the subcommittee. I also want to thank our panelists 
who have devoted their lives to our country as well.
    I am pleased that we will have an opportunity today to 
discuss one of the most important issues in military 
acquisition, and that is shipbuilding. It's been very important 
to have a robust fleet. We have seen the critical role that our 
Navy has played in the global war on terrorism, and I am 
committed to making sure that the Navy and the Marine Corps 
have the resources needed.
    So, thank you.
    Senator Talent. I also want to welcome the panelists, thank 
you for giving us your time. I have looked forward to this 
hearing. I think we will raise general and specific issues that 
will be helpful to everybody.
    Secretary Young, you're going to speak on behalf of this 
distinguished panel. Everybody is looking to see that you do a 
good job representing them. So go ahead, and give us your 
testimony.

 STATEMENT OF HON. JOHN J. YOUNG, JR., ASSISTANT SECRETARY OF 
     THE NAVY FOR RESEARCH, DEVELOPMENT, AND ACQUISITION; 
ACCOMPANIED BY VICE ADM. JOHN B. NATHMAN, USN, DEPUTY CHIEF OF 
 NAVAL OPERATIONS FOR WARFARE REQUIREMENTS AND PROGRAMS; VICE 
    ADM. J. CUTLER DAWSON, JR., USN, DEPUTY CHIEF OF NAVAL 
 OPERATIONS FOR RESOURCES, REQUIREMENTS, AND ASSESSMENTS; LT. 
 GEN. ROBERT MAGNUS, USMC, DEPUTY COMMANDANT FOR PROGRAMS AND 
RESOURCES, HEADQUARTERS; AND LT. GEN. EDWARD HANLON, JR., USMC, 
         COMMANDING GENERAL, COMBAT DEVELOPMENT COMMAND

    Mr. Young. It's probably a daunting challenge, but Mr. 
Chairman, Senator Kennedy, Senator Collins, it is a privilege 
to be here today to appear before the subcommittee to discuss 
the Navy and Marine Corps shipbuilding programs in the fiscal 
year 2005 budget request.
    I would like to, on behalf of all of us and Secretary 
England, the Chief of Naval Operations (CNO), and the 
commandant, thank you and the subommittee for your great 
personal and strong support for Navy and Marine Corps programs.
    The fiscal year 2005 request includes funds for nine ships 
reflecting the continuous and successful efforts by the 
Department of the Navy to increase the number of ships we are 
purchasing. Within these efforts, it's also important to 
improve how we buy ships, and I'd like to emphasize a few 
points in this area.
    On Virginia-class, the Department reached agreement with 
our industry partners and, through the support of Congress, 
signed a Virginia-class multi-year contract which included 
incentive, that rewards and measures performance, a realistic 
cost target, and terms that strongly incentivize on, or below, 
target cost performance. The Virginia-class multi-year contract 
is essential to stabilizing this program at low procurement 
rates. Regarding the CVN-69 carrier refueling overhaul, in a 
remarkable action, the Department reached agreement with our 
industry partners to renegotiate an existing contract for the 
refueling overhaul. This contract converted some fixed profit 
to incentive fee, linking the profit to discrete milestones and 
adjusted the share-lines to again incentivize on-target 
delivery.
    CVN-70 was another refueling, but the refueling of CVN-70 
was delayed 1 year to take advantage of the fuel life available 
in that carrier. This decision led to a comprehensive 
evaluation of the carrier program resulting in decisions to 
enhance maintenance actions on the U.S.S. John F. Kennedy, dock 
the U.S.S. George Washington, and slip the CVN-21 one year. 
These efforts helped stabilize the workload at Newport News. 
More importantly, all of these decisions reflected in 
unprecedented collaboration between the acquisition team, the 
fleet, the requirements community represented here at the 
table, and our industry partners. These efforts sought to 
balance capability, cost, industry workload, and other factors 
in the shipbuilding program.
    The next step beyond the existing programs is research, 
development, test, and evaluation (RDT&E) funding of lead 
ships. We are working this alternate method of funding ship 
construction and the fiscal year 2005 budget request reflects 
funds to begin construction of the lead surface combatant ship 
(DD(X)) and the lead Littoral Combat Ship (LCS) using RDT&E 
funds. This approach mirrors the approach used in every other 
weapons development program. Indeed, tactical aircraft programs 
are developed using RDT&E funds to establish the production 
process and build multiple pre-production aircraft.
    These steps are important to establishing a production 
process that can be efficient for the ship class, just as it is 
for the aircraft production run.
    Further, we need the ability to adjust the lead ship budget 
modestly in order to avoid the detrimental effects of prior 
year completion bills. Under the current process, we give a 
program manager a block of money to spend carefully for 5 to 7 
years, building a sophisticated new ship that has never been 
built before. The program manager, just as you or I, is likely 
to be very cautious about investing for the class, conserving 
his funds to make sure he or she can deliver the lead ship. We 
need to relieve this pressure and allow appropriate budget 
adjustments to be made to ensure the development of a 
successful construction process for the class.
    Steps such as these, endorsed by Congress, were essential 
to programs like C-17, and reflect the procedure again used in 
every other development program. With improved buying 
practices, we then need to proceed to efficiently and 
effectively deliver capability. As the subcommittee has rightly 
observed, the capabilities of ships we are buying today are 
dramatically different from the capabilities of ships even a 
few years ago. Further, efforts are under way to provide even 
greater capability; let me offer a couple of examples.
    Until 1990, we relied on Ticonderoga-class Aegis-equipped 
cruisers with Standard Missile-1 and Standard Missile-2 
variants to provide air defense capability that could cover an 
area roughly 25 miles in radius from the ship. Today, an 
Arleigh-Burke Aegis equipped destroyer with SM-2 Block three 
and Block four missiles provides air defense capability to 
cover an area that exceeds 50 miles in radius from the ship.
    In the future, the acquisition community and requirements 
community are working together to deliver the Extended Range 
Active Missile (ERAM). This is a missile that will allow an 
Aegis-equipped destroyer to defend against threats at ranges--
greater than 100-mile radius from the ship, including over land 
targets. Beyond that, with the Advanced Hawkeye, ERAM, and 
Aegis together, we will be able to defend beyond and below the 
radar horizon addressing threats before end game maneuvers, 
enhancing our layered defense ship self-defense opportunities.
    Let me talk for a moment, if you would, about striking 
capability. During Operation Desert Storm it is estimated that 
32,000 ``dumb bombs'' and 900 precision-guided munitions (PGM) 
were expended. In Operation Iraqi Freedom, 235 ``dumb bombs'' 
and 5,222 PGMs were expended. During Operation Desert Storm, 
carriers provided about 70 sorties per day, per carrier or 
about 420 sorties per day off of 6 carriers.
    In Operation Iraqi Freedom, carriers generated 90 sorties 
per day, per carrier or about 450 sorties per day off the 5 
carriers. The Navy has established a goal for CVN-21 of 
generating 160 sorties per day with a surge capability to 220 
sorties per day, all of which will likely be able to kill 
multiple targets at 50 percent greater range using the F/A-18E/
F and the Joint Strike Fighter.
    These numbers provide some example of far greater 
capability than today's naval platforms provide as often 
outlined by Secretary England, Admiral Clark, and General 
Hagee.
    I'm grateful to the subcommittee for the chance to offer 
just a few examples of how the Department is changing it's 
approach to acquisition, approach to requirements, and approach 
to delivery of capability. We all look forward to any questions 
you have.
    [The joint prepared statement of Secretary Young, Vice Adm. 
Nathman, Vice Adm. Dawson, Lt. Gen. Hanlon, and Lt. Gen. Magnus 
follows:]
Joint Prepared Statement by Hon. John J. Young, Jr.; Vice Adm. John B. 
 Nathman, USN; Vice Adm. James C. Dawson, USN; Lt. Gen. Edward Hanlon, 
              Jr., USMC; and Lt. Gen. Robert Magnus, USMC
    Mr. Chairman, distinguished members of the subcommittee, thank you 
for this opportunity to appear before you to discuss the Department of 
the Navy's fiscal year 2005 shipbuilding programs.
    Your Navy and Marine Corps team's outstanding performance in the 
global war on terrorism and Operations Enduring Freedom (OEF) and Iraqi 
Freedom (OIF) last year underscored the high return on your investment 
in our combat readiness, our people, and our unique maritime 
warfighting capabilities. Your return on investment included the lift 
for 94 percent of the Nation's joint warfighting capability. It 
demonstrated the latest technology in surveillance, command and 
control, and persistent attack operating from sovereign U.S. territory 
and exploiting the vast maneuver space provided by the sea.
    The global war on terrorism, OEF, and OIF demonstrated the enormous 
contributions naval forces make to the effectiveness of joint and 
coalition forces. Analyses of these conflicts indicate that the 
warfighting concepts, capabilities development process, and advanced 
technologies we are pursuing in our Naval Power 21 vision are on the 
right vector. Experimentation with forward deployed Expeditionary 
Strike Groups has increased credible global combat capability with 
which to fight the war on terror and project power. We have leveraged 
OIF experience to implement the Fleet Response Plan--increasing the 
number of Carrier Strike Groups deployed or readily deployable. The 
Navy and Marine Corps team now faces a rare inflection point in history 
with technological infusions and several new ship classes coming on 
line within the next few years. This year, we will pursue distributed 
and joint networked solutions that could revolutionize our capability. 
With the fiscal year 2005 budget request we intend to:

         Shape the 21st century workforce and deepen the growth 
        and development of our people, and
         Accelerate our investment in Naval Power 21 to 
        recapitalize and transform our force and improve its ability to 
        operate as an effective component of our joint warfighting 
        team.
                developing joint seabasing capabilities
    As a means of accelerating our investment in Naval Power 21, we are 
employing the Naval Capability Development Process and Expeditionary 
Force Development System (EFDS). The Naval Capability Development 
Process and EFDS take a concepts-to-capabilities approach to direct 
investment to achieve future warfighting wholeness. The Naval 
Capability Development Process takes a sea-based, offensive approach 
that provides power projection and access with distributed and 
networked forces featuring unmanned and off board nodes with 
penetrating surveillance via pervasive sensing and displaying that 
rapidly deliver precision effects. The EFDS assesses, analyzes and 
integrates Marine Amphibious Ground Task Force (MAGTF) warfighting 
concepts, and requirements in a naval and joint context to support the 
overarching operational concept of Joint Seabasing. The fiscal year 
2005 shipbuilding budget request reflects the investments that will 
most improve our warfighting capability by investing in future sea-
based and expeditionary capabilities for the Navy and Marine Corps.
                         shipbuilding programs
    Our fiscal year 2005 budget request calls for construction of nine 
ships: three Arleigh Burke (DDG-51) class destroyers; one Virginia (SSN 
774) class submarine; one San Antonio (LPD 17) class amphibious 
transport dock ship; two Lewis & Clark (T-AKE) class auxiliary cargo 
and ammunition ships; one DD(X); and one Littoral Combat Ship (LCS). If 
approved, this would increase to 38 the total number of ships 
authorized and under construction. The fiscal year 2005 budget request 
represents an increase of two ships over the seven ships in the fiscal 
year 2004 program. In addition, we have requested funding for advance 
procurement of the 8th and 9th Virginia class submarines, Economic 
Order Quantity (EOQ) material procurement for the 8th, 9th, and 10th 
Virginia class submarines, advance procurement for CVN-21 construction 
and CVN-70 refueling complex overhaul (RCOH), continued funding for 
SSGN Engineered Refueling Overhaul (ERO) and conversion, continued 
funding for LHD-8, funding for Ticonderoga class cruiser modernization, 
and the service life extension for five Landing Craft Air Cushion 
(LCAC) craft.
    These shipbuilding programs are the leading edge of our naval 
transformation to the Seabasing concept, which is modularly constructed 
on four capability pillars. Those pillars are Sea Shield, Sea Base, Sea 
Strike and ForceNet. Sea Shield is made up of those components that 
provide protection and assured access to our forces. Sea Base is the 
pillar of capabilities that allows naval forces to exploit the maneuver 
space provided by U.S. control of the sea. Sea Strike includes all of 
the capabilities within the force that provide offensive fires and 
maneuver in a complementary synergistic fashion. This includes strike 
aircraft, missiles, surface fires, and expeditionary maneuver elements. 
ForceNet is the network that ties these disbursed platforms together 
through command, control, communications, computers, intelligence, 
surveillance, and reconnaissance (C\4\ISR) nodes to provide robust 
battle space awareness, precise targeting, rapid and precise fires and 
maneuver and responsive logistics. We have grouped our shipbuilding 
programs into each of the four seabasing pillars based on their primary 
weapon systems however each platform has the ability to perform 
functions of other pillars as well.
Sea Shield
    Arleigh Burke (DDG-51) Class Destroyer
    The fiscal year 2005 budget request includes $3.445 billion for the 
procurement of the final three Arleigh Burke (DDG-51) class destroyers. 
These ships are part of a 10 ship, fiscal year 2002 through fiscal year 
2005 Multi Year Procurement (MYP) contract awarded in 2002, which 
finalized the DDG procurement profile and sustains our industry 
partners until we transition to DD(X) production.
    Ticonderoga (CG 47) Cruiser Modernization Plan
    The fiscal year 2005 budget request includes $166 million for 
systems that will add new mission capabilities and extend the combat 
system service life of the Ticonderoga (CG 47) class. The upgrade of 
these ships will add new, and enhance existing, combat system 
capabilities to improve compatibility in joint and coalition warfare 
environments. Furthermore, these improvements will upgrade the quality 
of life for our sailors and lower the operating costs for those ships.
    Littoral Combat Ship (LCS)
    The LCS will be a networked, agile, mission focused, stealthy 
surface combatant with capabilities optimized for responsiveness to 
threats in the littorals. LCS will utilize core onboard sensors and 
weapons combined with reconfigurable mission packages employing manned 
and unmanned vehicles and modular sensors and weapons to execute 
assigned tasks and operate as a node in a network centric battle force. 
Primary missions for the ship will include littoral mine warfare, 
littoral surface warfare and littoral anti-submarine warfare to ensure 
access of friendly forces in littoral regions. The LCS program awarded 
contracts to three industry teams in July 2003. The fiscal year 2005 
budget request includes $352 million of RDT&E funding for LCS platform 
and mission system development and initial ship procurement. The LCS 
spiral development acquisition strategy will support construction of 
multiple flights of focused mission ships and mission packages with 
progressive capability improvements. Flight 0 is comprised of four 
ships, with the first ship requested for authorization in fiscal year 
2005 using RDT&E, N funds with detail design and construction 
commencing in fiscal year 2005. Mission modules will deliver in support 
of the Flight 0 seaframe delivery in fiscal year 2007. Flight 0 will 
develop and demonstrate several new approaches to Naval warfare 
including suitability of large-scale modular mission technologies and 
new operational concepts in the littoral. The industry teams submitted 
their proposals for final system design and detail design and 
construction phase in January 2004. The down select to one or two teams 
for final system design and detail design and construction of Flight 0 
is anticipated in late spring 2004.
    Virginia (SSN 774) Class Attack Submarines
    With current construction progressing on schedule, the fiscal year 
2005 budget request includes $2.5 billion for the seventh ship, advance 
procurement for the eight and ninth ships of the Virginia class, and 
Economic Order Quantity (EOQ) material procurement for the eighth, 
ninth, and tenth Virginia class submarines. There are a total of 10 
Virginia class submarines under contract. This year's ship will be the 
second ship in the five-ship MYP. This MYP contracting approach 
provides the Navy savings of $80 million per ship for a total savings 
of $400 million compared to ``block buy'' procurement. These ships will 
continue to be built under the teaming approach adopted by Congress in 
1998, which maintains two capable nuclear submarine shipbuilders. In 
accordance with fiscal year 2004 congressional direction, procurement 
of two Virginia class submarines per year is delayed until fiscal year 
2009.
Sea Strike
    DD(X) Destroyer
    The fiscal year 2005 budget request includes $1,432 million in 
RDT&E funds for DD(X) with $221 million for lead ship detail design and 
construction. The Navy is 2 years into the competitively awarded DD(X) 
design and technology development effort. The winning contractor has 
organized a national team of industry experts to achieve the most 
innovative and cost-effective solutions for development of the DD(X) 
through spiral development of technologies and engineering, with 
promising systems being employed on existing platforms and other future 
ship classes. DD(X) will dramatically improve naval surface fire 
support capabilities. Planned technologies, such as integrated power 
system and total ship computing environment in an open architecture, 
will provide more affordable future ship classes in terms of both 
construction and operation. In a noteworthy partnership with industry, 
the Navy shifted the DD(X) volume search radar to S-band, providing 
increased capability and the future potential to support missile 
defense operations.
    SSGN
    The fiscal year 2005 budget requests $517 million of procurement 
funding for the continued conversion of the third Ohio class submarine, 
and the engineered refueling overhaul of the fourth and final submarine 
to be converted to SSGN. When completed, these submarines will provide 
transformational warfighting capability carrying up to 154 Tomahawk 
cruise missiles and support deployed special operating forces. The four 
SSGN conversions will be executed utilizing a public-private 
partnership conducting the work in naval shipyards, and are scheduled 
for delivery in fiscal year 2007.
Sea Base
    CVN-21 Class
    The CVN-21 program is designing the aircraft carrier for the 21st 
century, as the replacement for the Nimitz class nuclear aircraft 
carriers. CVN-21 will be the centerpiece of tomorrow's Carrier Strike 
Groups and a contribution to every capability pillar envisioned in Sea 
Power 21. CVN-21 will be a primary force in Sea Strike with 
enhancements such as a future air wing which will include the Joint 
Strike Fighter and Joint Unmanned Combat Air Systems. CVN-21's 
transformational command centers will combine the power of FORCEnet and 
a flexible open system architecture to support multiple simultaneous 
missions, including integrated strike planning, joint/coalition 
operations and Special Warfare missions. The CVN-21 based strike group 
will play a major role in Sea Shield protecting United States 
interests, while deterring enemies and reassuring allies. CVN-21 will 
provide the United States the capability to quickly project combat 
power anywhere in the world, independent of land based support.
    Overall, CVN-21 will increase sortie generation rate by nearly 20 
percent, increase survivability to better handle future threats and 
have depot maintenance requirements that could support an increase of 
up to 25 percent in operational availability. The new design nuclear 
propulsion plant and improved electric plant together provide three 
times the electrical generation capacity of a Nimitz class carrier. 
This capacity allows the introduction of new systems such as 
Electromagnetic Aircraft Launching System, Advanced Arresting Gear, and 
a new integrated warfare system that will leverage advances in open 
systems architecture to be affordably upgraded. Other features include 
an enhanced flight deck, improved weapons handling and aircraft 
servicing efficiency, and a flexible island arrangement allowing for 
future technology insertion. The fiscal year 2005 budget request 
includes $626 million for continued development of CVN-21. The 
Construction Preparation Contract, planned for 3rd quarter fiscal year 
2004, will be for design, advance planning, advance construction, non-
nuclear advance procurement, and continuation of research studies to 
further reduce CVN-21 manpower requirements and total ownership costs. 
The construction contract is scheduled for award in 1st quarter fiscal 
year 2007, with ship delivery in 2014. The program is currently working 
toward a Milestone B review in 3rd quarter fiscal year 2004.
    Nimitz Class
    Refueling and Complex Overhauls (RCOH) provide a bridge between 
maintaining current readiness requirements and preparing the platform 
for future readiness initiatives in support of Sea Power 21 by 
leveraging developing technologies from other programs and platforms 
that support RCOH planning and production schedules for advantageous 
insertion during this major recapitalization effort.
    The Navy negotiated a modification to the RCOH contract for U.S.S. 
Dwight D. Eisenhower (CVN-69) in December 2003. The renegotiated 
contract provides incentives for Northrop Grumman Newport News (NGNN) 
and the Navy team to work together to manage the completion of this 
complex availability. The Navy and NGNN created a better incentive 
contract structure to contain cost risk and maintain schedule. It is 
expected that this improved acquisition model will be used in future 
contracts for aircraft carrier construction and overhaul. U.S.S. Dwight 
D. Eisenhower overhaul is scheduled to complete by November 2004.
    The U.S.S. Carl Vinson (CVN-70) RCOH start was delayed 1 year to 
November 2005. U.S.S. Carl Vinson will remain available for operations 
until summer 2005. This added availability enables the Navy to maintain 
a flexible defense posture and at the same time bring increased 
capability to project credible, persistent naval combat power globally. 
Other advantages for the move included maintaining a balanced and 
stabilized industrial base for Navy ship maintenance in both public and 
private yards and providing additional near-term funding for ongoing 
recapitalization efforts. The fiscal year 2005 budget request includes 
$333 million in advance procurement funding for the U.S.S. Carl Vinson 
overhaul.
    Lastly, the Navy commissioned the U.S.S. Ronald Reagan (CVN-76) in 
July 2003, and laid the keel for the George H.W. Bush (CVN-77) in 
September 2003.
    MPF(F)
    Most prominent in highlighting the value and power of the Nation's 
naval expeditionary capability was the Marine Corps' participation in 
Operation Iraqi Freedom. Success in this operation was due to our naval 
dominance, our expeditionary nature, and our flexibility and 
adaptability to defeat the challenges posed by enemy threats. Among 
other naval assets, eleven strategically located Maritime 
Prepositioning Force (MPF) ships were unloaded in 16 days to provide 
the equipment and sustainment required for two Marine Expeditionary 
Brigades. Exploiting the operational speed, reach, and inherent 
flexibility of seapower, the Navy-Marine Corps team achieved a rapid 
buildup of sustained warfighting power that was combat ready to support 
U.S. Central Command.
    We continue to revolutionize this invaluable capability. We are 
currently in the process of analyzing potential platform replacements. 
The analysis of alternatives for MPF(F) is complete. Current guidance 
requires MPF(F) to provide the combatant commander highly flexible 
operational and logistics support for missions projecting power ashore 
from a sea base, or during independent operations. Unlike current pre-
positioning ships, MPF(F) will greatly improve our forces' flexibility 
by allowing operations that are fully interoperable with naval and 
joint forces. MPF(F) represents the link between forward deployed 
forces and their reach-back bases both in the continental United States 
(CONUS) and overseas, and will be a crucial element to Enhanced 
Networked Seabasing both for naval and joint forces. Unlike any other 
prepositioning ship, the MPF(F) will not be reliant on a port facility, 
greatly reducing our dependence on international support. The ability 
to rapidly close and employ a large force dramatically increase the 
flexibility and utility of the seabased force and present the combatant 
commander with more response options than ever before. A formal report 
of the results is expected in Spring 2004.
    Landing Craft Air Cushion (LCAC)
    Our fleet LCACs saw dramatically increased operational tempo 
supporting worldwide operations during the past year, underscoring the 
need for the LCAC Service Life Extension Program (SLEP). The program, 
designed to extend the service life of LCACs to 30 years, had several 
notable accomplishments during the past year: LCAC 25 was delivered on 
time in November 2003, and LCAC 2 was delivered on time in February 
2004. We awarded a contract to Textron Marine and Land Systems New 
Orleans for the fiscal year 2002 and 2003 SLEPs (six craft total) in 
December 2002 and all craft are currently on schedule. The award of the 
fiscal year 2004 contract for four craft is anticipated in the second 
quarter of fiscal year 2004. The fiscal year 2005 budget request 
includes $90 million for SLEP of five craft. We are continuing with our 
revised acquisition strategy to refurbish vice replace the buoyancy 
boxes and will competitively select the fiscal year 2005 SLEP work. The 
revised acquisition strategy will deliver the required LCAC capability 
and service life while providing a cost savings of $104 million through 
the FYDP for the program.
    LPD 17
    The San Antonio (LPD 17) class of amphibious transport dock ships 
represents a critical element of the Navy and Marine Corps future in 
expeditionary warfare. The fiscal year 2005 budget request includes 
$966 million to fully fund the construction of the seventh ship. Four 
additional LPD 17s are included in the Future Years Defense Program 
(FYDP), with the final ship of the 12-ship class planned beyond the 
FYDP. The fiscal year 2005 budget request reflects rephasing of one 
ship from fiscal year 2006 to fiscal year 2005 that will result in a 
more efficient workload profile as well as a total FYDP savings of 
approximately $40 million. Lead ship detail design is complete, lead 
ship fabrication is approximately 85 percent complete, and the lead 
ship was launched and christened in July 2003. Current efforts are 
focused on managing schedule and cost. LPD 18 construction began in 
February 2002. LPD 19/20 construction commenced in July 2001 and 
October 2002, respectively. We awarded the contract for LPD 21 in 
November 2003, named New York to honor the victims of the World Trade 
Center attack, and plan to award the contract for LPD 22 in 3Q fiscal 
year 2004.
    LHD-8
    In accordance with congressional direction to incrementally fund 
LHD-8, the fiscal year 2005 budget requests $236 million for continued 
construction. LHD-8 will be the first big deck amphibious ship that 
will be powered by gas turbine propulsion, and all of its auxiliary 
systems will rely on electrical power rather than steam. This change is 
expected to realize significant lifecycle cost savings. The ship, 
recently named Makin Island, had its keel laying ceremony on February 
14, 2004.
    LHA(R)
    The fiscal year 2005 budget requests $44.2 million in R&D for 
LHA(R). LHA(R) concept designs are being evaluated within the context 
of Joint Seabasing and power projection. This ship will be the 
centerpiece of the Expeditionary Strike Group, a contributor to the 
Expeditionary Strike Force, and will carry expeditionary warfare 
through the middle of this century. The ship will leverage the future 
Sea Based environment and greatly enhance command and control 
capabilities and at sea training for embarked forces. The resulting 
design is planned to provide a transformational capability that is 
interoperable with future amphibious and Maritime Prepositioning Force 
ships, high-speed vessels, and advanced rotorcraft like the MV-22 and 
CH-53X, and the Joint Strike Fighter. This funding supports design 
development leading to a planned ship construction award in fiscal year 
2008.
    Auxiliary Dry Cargo Ammunition Ship (T-AKE)
    The fiscal year 2005 budget request includes $768 million for the 
seventh and eighth ships. The first four ships have been authorized and 
appropriated and are under contract with National Steel and 
Shipbuilding Company (NASSCO) for construction. Exercise of the option 
for the fifth and sixth ships occurred in January 2004. Lead ship 
construction commenced in September 2003, with a projected delivery 
date of October 2005. The second ship is projected to deliver in fiscal 
year 2006, while the third and fourth ship deliveries are projected for 
fiscal year 2007.
    Cobra Judy
    The Navy successfully contracted with industry to develop and build 
a replacement for the aging Cobra Judy surveillance platform. Working 
in partnership with industry and leveraging Missile Defense Agency 
investments in radar technology, the Navy developed an innovative 
strategy which accelerated the acquisition of this essential capability 
while also creating the possibility to leverage the Cobra Judy program 
to create a competition for the radar for the Navy's future cruiser, 
CG(X).
            completion of prior year shipbuilding contracts
    I am pleased to report that the Navy experienced zero growth on 
ship construction contracts over the last year. The management actions 
instituted to address shipbuilding contract shortfalls have been 
effective. Elimination of the prior year shipbuilding budget line is 
within our grasp. We are continuously working to review the scope and 
cost of ships under construction to avoid new bills. We are also 
working diligently to set valid cost targets for new ships and 
combining this with contract terms and conditions that reward good 
performance. Congress provided $636 million in fiscal year 2004 to 
address cost growth for ships contracted in 1999 and 2000. The fiscal 
year 2005 budget request reflects $484 million to address similar 
shortfalls, resulting in a prior year cost to complete remaining 
balance of $46 million. However, we are still reviewing the projected 
completion cost for CVN-77, a ship that was budgeted and contracted for 
under previous procedures. To avoid future prior year completion bills, 
it is essential that ships be budgeted at targets which reflect the 
material and labor cost escalation experienced by U.S. industry.
                                summary
    Our naval forces are unique in their contribution to the Nation's 
defense. Versatile naval expeditionary forces are the Nation's first 
responders, relied upon to establish the tempo of action, control the 
early phases of hostilities, and set conditions for decisive 
resolution. America's ability to protect its homeland, assure our 
friends and allies, deter potential adversaries, and project decisive 
combat power depends on maritime superiority. The transformation of 
naval forces is dedicated to greatly expanding the sovereign options 
available worldwide to the President across the full spectrum of 
warfare by exploiting one of our Nation's asymmetric advantages--
control of the sea. The transformation of our naval forces leverages 
enduring capabilities for projecting sustainable, immediately 
employable joint combat power by facilitating the accelerated 
deployment and flexible employment of additional joint capabilities 
through a family of systems and assets afloat. Our fiscal year 2005 
Shipbuilding Budget request seeks to accelerate our investment in Naval 
Power 21 to transform our force and its ability to operate as an 
effective component of the joint warfighting team. Congressional 
support of this shipbuilding plan is essential to achieving this 
vision--I thank you for your consideration.

    Senator Talent. Great. Thank you, Mr. Secretary.
    Let me pose an initial couple of questions to Admirals 
Nathman and Dawson and then I'll defer to Senator Kennedy and 
Senator Collins in case you need to go. You probably have a few 
questions, we will get to you as quickly as we can.
    Let me phrase what I think is the central issue here. Now, 
the CNO has said that we need a 375 ship Navy, that's the right 
objective for the Navy. Then the Department in rolling out the 
budget request this year indicated that it was scaling up to a 
level that would support a 300-ship fleet. As I read that, 
that's including the 65 or so LCSs that we intend to buy.
    So, it looks to me like we got a situation where CNO is 
saying 375 with LCS and the Department is saying 300 with LCS. 
What is the status of the 375 ship requirement?
    Then is the ``presence with a purpose'' concept of 
operations effecting this? In other words, what appears to be 
the shift towards developing or relying more on surge 
capabilities rather than forward presence effecting the Navy's 
judgement about how many ships we need?
    Admiral Nathman. Yes, sir. I'll try and take the first part 
and I'll get help from Admiral Dawson where I get it wrong, 
sir.
    I think the targets, the setting was about 375 and included 
LCS. The Department of Defense's number doesn't include LCS, 
but let me get to that number here in a second.
    The view was, particularly after September 11, that there 
was a need for the Navy to look at its presence with a purpose 
in a global sense. We needed to dramatically change the 
striking power that we brought to sea when we were there, 
because of these compelling issues you get into in terms of 
timing, trying to make a difference, trying to be decisive on 
scene, trying to shape the battle space quickly. Because this 
is one of the things we're being driven into is this: can we do 
things more quickly before things get out of control?
    So, when you look at that, the Navy decided that we had to 
look at more distributed expeditionary and striking forces 
around the globe. We recognize that in support of the Marine 
Corps we need to rebaseline our Amphibious Ready Groups into 
Expeditionary Strike Groups to really provide the striking 
power and the fires that the Marine Corps would need for the 
mission and for the striking power for some of the decisive 
capability we felt we needed on scene, since we're there.
    We call that ``Global Concept of Operations (CONOPs)'' when 
you add in the need then for nuclear-power cruise missile 
attack submarine missile strike groups for missile defense 
groups, you end up with a number that's around 375. That 
represents the 37 striking groups that we feel meet the 
compelling case for this presence with a purpose.
    Now, what is missing in there is we also felt that one of 
our compelling needs was the gaps that we have because our 
fight is going to the world's littorals; it's not the blue 
water fight. That left in 1992, it's gone. So, the compelling 
issue was, what were our gaps in the littorals and what were 
the anti-access challenges we had when we got into the 
littorals? This is where we saw the importance of one portion 
of the force being the Littoral Combat Ship (LCS) to go after 
these anti-access, denied access capabilities that could 
potentially be cheaply bought by certain countries.
    So, the focus of LCS was not only a certain number but the 
capability we're willing to put on LCS in terms of mine 
warfare, anti-submarine warfare, and surface warfare effects in 
terms of control of the maritime battle space that we had 
there. Those numbers combined then with the maritime pre-
positioning force which we see as truly a warship, because of 
what it leverages for the Marine Corps and the Navy in terms of 
Sea Basing. We roughly get to the number of 375, sir.
    Senator Talent. Okay. I hear you telling me and Mr. 
Secretary, tell me if this isn't the case. The Navy and the 
Department are still committed to around 375, which would 
include LCS?
    Mr. Young. Yes, sir.
    Senator Talent. Now, I had a conversation with the CNO 
about numbers. He asked me a question that began to change my 
thinking on this a little bit. He said, ``You know, in the mid-
1980s we had almost a 600-ship Navy,'' and now we don't. He 
said, ``But would anybody argue that the Navy is not more 
capable today than it was 20 years ago?'' I had to say, ``Well, 
no, it obviously is more capable.''
    Are you all thinking more in terms of trying to have as an 
index of measurement of whether you have a Navy that can meet 
the military strategy, defining it more in terms of 
capabilities? Is there any process you're going through to 
define different kinds of indexes for us so that we can join 
you in this and do oversight the way we need to do it?
    Admiral Nathman. Yes, sir. I think that's why I'm here 
today. There wasn't an N-7 code 3 years ago and now there is, 
and it was all about the CNO's angst over, what is our 
capability? What is our analysis? What's our unification around 
that work, around capabilities? I wanted to give you a quick 
example about capabilities, Senator, that may change your view 
about being threat-based versus capability-based.
    If you build a force that's truly threat-based, you can 
potentially over invest in different capabilities into each 
different ship type or aircraft type, because the debate 
becomes, why don't I put more capability into each different 
platform because it may potentially face that threat. When you 
do things on a capability-basis you look at the fight in a much 
more integrated way. If you look at things in a much more 
integrated way, you have opportunities to, what I would say, 
more properly proportion your investment to provide the 
capabilities you want and to distribute it in an integrated way 
which may, I believe, lower the total cost of different 
platforms. You get essentially, the same capability but you 
potentially get it at a lot lower cost.
    I'll give you an example of that. One of the things that we 
have in our analysis is a very compelling case about ship 
defense. That we have a great amount of layered missile defense 
in terms of the air battle, and if you look at the individual 
requirement documents that drive the self-defense capability to 
those ships, you can potentially over invest in different 
systems to protect that ship. But when you look at what an 
enemy can potentially do when it has to go through these layers 
of air defense to get to the individual ship, you may change 
your mind then about how robust those particular systems have 
to be. That's not to say we're not going to defend our ships in 
terms of self-defense, but it means that you can make better 
decisions about the total investment across the missile and air 
defense challenges that we have.
    So, our campaign analyses, our work is really about 
replicating campaign analyses which are close to the combatant 
commander's fights. So, they're high fidelity. Then looking at 
very particular tactical situations which tend to stress what 
the Navy brings, and in some cases the Marine Corps brings, 
since the Marine Corps is integrated into these capability-
based situations, then what would you end up with in terms of 
the challenges or gaps? This analysis is, I would say, is very 
high fidelity analysis compared to 2 years ago. We are really 
focused on what are our unique warfighting gaps, what are those 
challenges, and then what is the integration of investment that 
you want to spend and how do you want to spend it? So, I 
believe it's the right approach.
    It also allows you then to compete or to make your case 
very clearly when it comes to the joint force discussion about 
what are the key attributes of what a naval force ought to 
bring to the fight.
    Senator Talent. I'll get back to that in just a second, but 
Secretary Young I saw you nodding your head. Let me ask you for 
the record, is the Office of the Secretary of Defense (OSD) 
still committed to the 375 ships for the Navy?
    Mr. Young. Yes, sir. Our budgeted programs put us on a 
track to 305 ships. They have been supported and endorsed by 
OSD and the Office of Management and Budget (OMB). In fact, 
they have paid specific attention to our shipbuilding rates. We 
are pleased with the nine this year and we are going to keep 
working, hopefully as I said, to be successful in increasing 
those numbers, because the numbers have to be in a proper place 
in the budget to sustain 375 ships.
    Senator Talent. Okay. Three hundred and five plus LCS gets 
you to around 375.
    Mr. Young. Yes, sir.
    Senator Talent. Admiral Dawson, do you want to add anything 
to that?
    Admiral Dawson. If I could add one thing, Senator.
    As we look at our capability-based models, I'd like to 
articulate the five things that we factor in there.
    Senator Talent. Yes, that would be nice.
    Admiral Dawson. We look at how we are most likely going to 
conduct combat operations. The second thing we look at is the 
potential rules of engagement that we may be faced with when we 
go about those operations. The third thing we would look at 
would be the bases and the access that might be available to 
the naval force as they approach these operations. We were 
greatly influenced over the last year on the access that we 
were not able to get in Turkey, for example. The fourth thing 
that we look at would be systems performance. We look at what 
our new systems, that we hope to bring on in the future, will 
bring us in the way of capabilities and how they fit into the 
joint fight. That would bring me to the fifth point that we 
look at. We look at our joint partner and our coalition partner 
and what share that they will contribute as we arrive at what 
we might need. We then look at the peace-time employment. 
That's the wartime scenario. Then we look at the peace-time 
employment of the combatant commanders and how they need us to 
provide that presence with a purpose around the world.
    Senator Talent. I have more, but I want my colleagues to 
have an opportunity, so I'll recognize Senator Kennedy for 
questions he may have.
    Senator Kennedy. Thank you very much, Mr. Chairman.
    First of all, I want to try to understand the numbers. We 
were in a gradual declining numbers as I understand from 316 
ships headed south for around 275 ships. My question is, if the 
Navy can't even afford the 316 ships now, why should we expect 
the Navy be able to afford roughly 25 percent more in the 
future?
    Admiral Nathman. Well, sir, I think part of our answer is 
we have a model already for that that's been pretty successful. 
On the aircraft side we moved as rapidly as we could out of F-
14s, because of their very high operating cost. We felt like if 
we could move out of that faster, we could use the savings in 
operations and support of a very high cost aircraft like the F-
14, and then use it to invest in the Super Hornet.
    So, that's kind of our model right now in a way. We have 
older ships that are capable, but they become compelling in 
terms of the sustainment of those particular ships. Do those 
particular ships provide the overwhelming capability that we 
should protect, or should we look at opportunities to divest as 
it were in older ships that take a lot of manpower? We can see 
repair cost increasing and then the overall long-term support 
of those ships in terms of availabilities or overhaul. Can we 
then leverage those savings to move on to the new capabilities 
that we want?
    So, we looked at some of those ships and we made the 
decisions on those based on those capabilities, although 
they're effective, they're becoming obsolete and they don't go 
towards the gaps that we see in our warfighting capability 
analysis, which is the littoral gap and mine warfare and anti-
submarine warfare (ASW) and small surface combatant forces.
    So, I believe that drives us in many cases, and we do have 
to make affordability decisions in that debate, sir.
    Senator Kennedy. How would we deal with the threat if the 
Navy is going to be able to support only about the 300 ships, 
maybe a few more, perhaps even fewer than that, but would the 
Navy still want the fleet to include the 50 or 60 LCS?
    Admiral Nathman. Absolutely, sir. First of all, you have to 
pick the right warfighting ship and so the LCS goes after our 
gaps. So, I think that's the compelling case for LCS, it goes 
after the gaps. The more compelling case for LCS might be also 
the cost of the ship relative to the ships that it's replacing, 
both in terms of the pure acquisition side and the support 
side.
    So, we are looking now at costing, as I recall, of our 
flight 0 with the modules on board. The flight one around $250-
$260 million which includes the modules. So that's a 
significant savings in terms of what we outlay towards a 
replacement like a straight stick guided missile destroyer.
    So, I think we have to make these kinds of decisions and we 
have to reshape our force, not only based on what our gaps are 
but what our affordability is.
    Senator Kennedy. Well, let me ask you, Admiral, I support 
the new technologies for the Navy and the Marine team, but I 
have some concerns about the Littoral Combat Ship, the program 
just generally.
    In this case, it appears the Navy has deviated from the 
past practice in developing a new ship. Here the Navy looked 
where it was weak, you mentioned mine warfare--we'll come back 
to mine warfare in a minute. Shallow water, anti-submarine 
warfare, defeating the so-called swarm boat attacks and created 
a set of requirements about the short-falls. The Navy conducted 
a serious analysis to show how well the LCS could handle a 
threat. Yet as far as I can tell the Navy spent very little 
time figuring out whether the LCS system is the best way of 
dealing with a threat. For example, in dealing with Swarm boats 
should we send small LCS vessels close to shore to fight it out 
or should we develop enhanced weapons fired from helicopters or 
fixed wing aircraft to handle the problem? There are all kinds 
of other questions such as that.
    I can understand the reasons we might want to acquire the 
first few vessels to test and develop. Why should we leap into 
a 50 or 60 ship program without the analysis that shows the LCS 
is the most effective way to deal with the crucial problems?
    Admiral Nathman. Yes, sir. That's a great question, sir. I 
will tell you that in the last year and a half we put a great 
amount of rigor and work into our analysis. Not to bias the 
answer towards a Littoral Combat Ship, but to say, ``Does this 
capability that we think we will provide, in terms of denied 
access, that we want to put in the modules on Littoral Combat 
Ship, does it in fact make a difference?'' We use tactical 
situations to get down into very discrete looks at its ability 
to rapidly clear mines in terms of the northeast Asia challenge 
we may have. We looked at some very specific southwest Asia 
challenges in terms of constraints on strait passages and mine 
challenges there. We looked at a lot of specific ASW 
preparation of the battle space that we could get from Littoral 
Combat Ship with it's modules in ASW.
    So we have some very compelling analysis about the value of 
Littoral Combat Ship in terms of closing those key gaps. So, I 
think that's a very important validation.
    Secretary Young may want to comment on this, but the other 
part of LCS is that if you feel like you have a compelling gap, 
should you feel bound, or should the Service feel bound that we 
should procure in a more traditional way. We may be looking at 
years in terms of requirements development, CONOPs development, 
what are the particular technologies that we could leverage? It 
really says if you feel like you have a compelling gap, the 
logic says right away that you have opportunities to spiral in 
rapid development of these CONOPs before you make big 
acquisition decisions in terms of your budget. Why not rapidly 
develop these CONOPs, bring about some maturity in the modules 
and then go out and in terms of spiral looks at the investment 
and technology that enable you to go after the challenges that 
you discovered.
    So we think it is a very aggressive but very appropriate 
acquisition scheme for the ships, sir.
    Senator Kennedy. Well, I think you make a very compelling 
case if the LCS is the only way to go. The question is whether, 
as I understand for example, the unmanned aerial vehicles 
(UAV), unmanned surface vehicles (USV), and unmanned underwater 
vehicles (UUV) could just as well be deployed from larger 
vessels. In fact, the UUV that will conduct mine countermeasure 
operations is exactly the same Remote Mine-hunting System 
(RMS). The RMS that's now being installed on DDG-51 destroyers.
    We've gone through the analysis with aircraft carriers, 
concluded that larger is better, hence we have the Nimitz-
class; more efficient for conducting sustained operations. 
However, in this case, without much evidence we're making 
judgements that smaller is better.
    Admiral Nathman. Yes, sir.
    Senator Kennedy. This is not necessarily that larger is 
better in terms of mine sweepers but merely a point that is an 
important burden of proof found that the analysis that you have 
to date in terms of meeting those particular threats can best 
be done by this system before we buy the 50 or 60 of them.
    Mr. Young. Senator, maybe I could amplify your very point. 
Many of the missed elements of the mission modules for LCS are 
systems that are currently in development and were to be 
deployed like RMS, AQS 20 a surveillance system, and RAMICS 
which is a gun system to destroy mines, but we have limited 
existing space and flexibility for them. The DDGs now are fully 
tasked and so we had limited space, flexibility, and 
opportunity to put additional missions on those ships. LCS 
gives you a platform to carry the systems that we were 
developing and need as you've pointed out to handle the mine 
problem. It gives you a platform that's going to have 40 or 50 
knots in speed, so it can move quickly to those locations. It 
doesn't have to be tied to a carrier, which some portion of the 
DDG infrastructure is tied to the carrier to help with air 
cover. In fact, that is part of the CNO and Admiral Nathman's 
CONOPs with this greater air defense capability in the 
destroyer, more sorties can be devoted from the carrier to 
strike missions and fewer sorties devoted to flying air cover 
for the carrier.
    The package of analysis says all these things, I believe, 
very well. We're using, as you pointed out, the systems that we 
were going to deploy on the platforms we have, but now we see a 
much better and more effective way to put those systems in the 
littorals. Then we find ourselves in situations like Iraq doing 
literally thousands of maritime interdiction operations. We're 
using a billion dollar destroyer with a 300-plus person crew to 
interdict a ship when we have the opportunity with an LCS to 
chase those ships down and interdict them with a ship that has 
a very small crew.
    Some of this addresses your other point, which is that we 
have to reduce our operating cost and our manpower cost to 
continue the process of recapitalizing the Navy. All the assets 
you see us bringing to you in CVN-21, DD(X), and LCS are 
smaller crewed ships that have speed and multi-mission 
capability to be effective.
    Senator Kennedy. Well, that may all be well and good, but I 
mean you have these ships going all around as compared to 
helicopters that can stop them, stop them in the water or 
whatever. You've gone through this, but you've embarked on 
another major system and the question is whether all the 
alternatives have been thought through and considered as to 
meeting the new threat. We've heard very well from the admiral 
what those threats are. The real question is whether this is 
the best way to deal with it.
    This committee, for a long time has been interested in mine 
warfare. The Chief of Naval Operations came to the job 
promising to make readiness a first priority. I'm concerned the 
CNO's priorities may not have followed through with mine 
warfare. I'm told that the Navy has cut steaming days for mine 
hunters for the fiscal year 2005 budget. Last year, as in the 
past, mine hunters were funded for 28 days per quarter. This 
budget reduces that to 18 days. While some reductions may come 
from improvements and efficiency, it seems unlikely the Navy 
can meet the same level of readiness with a 36-percent 
reduction in training in 1 year. Admiral?
    Admiral Dawson. Yes, sir. We will attempt to mitigate that 
with simulation network and training that we'll do with our 
mine forces. In some cases we do it netted in with ships that 
are operating out of Norfolk and Ingleside and we'll do that 
through simulation. But we also are setting ourselves up so 
we'll have the investment to invest in these new modules and 
these new capabilities that we are going to use that have a 
much greater reach and be much more efficient as we look to the 
future.
    Admiral Nathman. Senator Kennedy, if you don't mind, if I 
could pile on to that, sir.
    Senator Kennedy. Please.
    Admiral Nathman. We've heard the message loud and clear on 
mine warfare and I'd like to tell you that in the last year and 
a half there's been a lot of personal time here, staff time 
invested around the transformational opportunities we have in 
mine warfare.
    If you look at the world as, if you're not on scene with 
your mine sweeper and you have to transit, your timelines are 
incredibly long. So, one of the views is, if you continue to 
shape your mine-warfare capabilities around your current force 
you'll never meet the timelines that our country feels are 
appropriate to be decisive on scene.
    That's why we put some of our mine forces forward, but the 
real commitment here is to transform our mine capabilities so 
we can use our organic capability in our Carrier Striking 
Groups and our Expeditionary Striking Groups. Now, LCS is a key 
part of that, because of the mine modules that we intend to put 
in it. If you look at the investment in the MH-60, which can 
lily pad off of LCS, and you look at the mine-warfare modules 
that we believe are key to the anti-access capability of LCS, 
you're going to have a rapid, distributed sea craft out there 
with an extensive amount of mine counter-measure capability.
    The other part of that transformational plan in terms of 
being a full-up round already being there and knowing what the 
battle space looks like, is a commitment to the understanding, 
the intelligence preparation of the battle space. We see that 
in sensors that we're going to put on the tactical unmanned 
aerial vehicle (TUAV) on LCS. We see it in our submarine force 
on the Long Range Mine Reconnaissance System, which we believe 
has a great transformational opportunity in terms of 
persistence of that capability in SSGN.
    What you do, sir, is you shape the battle space in terms of 
your knowledge of it and then you go after the mines you have 
to clear instead of the approach we had before, which was brut-
force, I think there's a mine field I'll have to clear it for 
the next 10 days. We believe these are keys to not only the 
sensor investment but the sea craft investment in LCS. The 
concept change of being forward and organic to rapidly change 
your mine-warfare capabilities. That's the path we're on.
    Senator Kennedy. Okay.
    Admiral Nathman. A great amount of intellectual capital was 
invested in that to sort of get that right.
    Senator Kennedy. I might submit some other questions about 
mine warfare. We're still looking 4 or 5 years down the road.
    Admiral Nathman. Yes, sir.
    Senator Kennedy. We have some real issues.
    Is that Admiral Costello I see right behind you? I just 
recognized him. Does he agree with everything that all of you 
are saying here this morning?
    Admiral Costello. You're doing a good job, sir. [Laughter.]
    Senator Kennedy. Okay.
    Admiral Nathman. He's hit me on the back of the head twice.
    Senator Kennedy. I've valued very much his service to my 
understanding a lot of the issues in terms of the Navy and of 
course he's been an outstanding leader for our forces. I 
haven't had a chance to see him back. We welcome you back.
    I want to thank you. There are the industrial base issues, 
obviously, that are going to be related here.
    My general concern is that we're going to sacrifice the 
Navy's modernization, constant renewal, and upgrading 
technologies for other kinds of purposes on this. I just don't 
want to see that. That is a little separate from where we're 
going with this new program, but I'm enormously concerned about 
that; the role of the Navy. I think you've outlined--I'm 
impressed by the thoughtfulness that you're giving to the 
nature of the new threat that we're being faced with--how we're 
going to get a handle on it from a technological point of view. 
I'm sure training and all the rest goes along with it. But we 
don't want to see a situation where the Navy wants to get a lot 
of smaller ships because the Navy believes it will be postured 
to compete for additional resources at OSD rather than buying 
some other kinds of systems, which would have more value, 
importance, and significance with regard to our national 
security.
    I'll submit some other questions, but I thank you very 
much. Interesting. Thank you.
    Senator Talent. Thank you, Senator.
    Senator Collins.
    Senator Collins. Thank you, Mr. Chairman.
    I think we are having exactly the right discussion here 
about numbers, the mix, and the capabilities of our fleet. 
Often times this debate is framed in terms of numbers versus 
capabilities, but the fact is that numbers are part of our 
capability. That's why I think the point that the chairman and 
the ranking member made about the size of the fleet is so vital 
in this debate.
    I remember in January 2002 going with a group of my 
colleagues to Afghanistan and we also landed on the aircraft 
carrier, the U.S.S. Roosevelt, which set a record for the 
number of days at sea. I don't know whether that record still 
stands, but it was certainly an impressive one. The crew was 
very proud of having set that record, but they were all so 
exhausted. The fact is, if you don't have enough ships, if the 
fleet is too small it doesn't matter how much capability you 
have--numbers are part of capability. I think we need to 
remember that in this debate.
    I very much appreciate the Navy's commitment to fully 
funding the procurement of three DDGs in fiscal year 2005, but 
I'm very concerned when I look at the impact on the size of the 
fleet as well as on our industrial base. That right now there's 
a gap with no major surface combatant being purchased in 2006. 
I think that'll be the first time if it occurs--I'm certainly 
determined to ensure it doesn't, that would ever happen in 20 
years that we would not be purchasing a single surface 
combatant ship.
    Secretary Young, could you address your ideal situation? I 
mean would you like to see a procurement in 2006 so that we 
don't have a gap that would exacerbate the problem with the 
numbers going in the wrong direction, as well as, have 
potentially an irreversible negative impact on our industrial 
base?
    Mr. Young. In the September time frame, Senator, we spent a 
lot of effort along the lines of Admiral Nathman's analysis, to 
conduct an industrial analysis to understand if we had a proper 
transition from DDG to DD(X). It becomes very important what 
assumptions you make about whether people succeed in building 
out the DDGs faster than planned, or they build to what we have 
historically observed. I am convinced that we do have a stable 
transition from DDG to DD(X). It is essential that DD(X) stay 
on schedule in that transition. We really cannot afford to have 
that ship be delayed or slipped. In that process, we could 
likely improve that situation by considering advance 
procurement in fiscal year 2006 for the second DD(X) or 
something that solidifies the bridge between DDGs and DD(X).
    There was a time when there were DDGs in the budget. We 
indeed have options on the contract in 2006 and there was also 
a potential DDG in 2007. Those ships sustain in the budget. So, 
this look at the industrial base was important and tells us we 
can manage through that transition, but there are steps that 
could be taken to make that transition more smooth and less 
risky for our industry partners.
    Senator Collins. I think this is an absolutely critical 
issue and I hope we can work together. I think the idea of 
putting in some advance procurement money in 2006 would be 
extremely helpful as well to make sure we don't have that kind 
of gap.
    Mr. Young. We internally keep studying this issue and have 
studied multiple aspects. I mentioned in the opening statement 
that the DD(X) and the LCS lead ships are research and 
development (R&D) funded, largely to establish a production 
process. I believe we would like to continue to evaluate the 
merits of funding the second lead ship, produced in a different 
yard, using R&D funds, that would let both yards have a process 
so that they can build the class efficiently rather than 
forcing the second yard, albeit building the second ship, to 
not having a chance to make budget adjustments or early start 
so they can set up their production process properly.
    Senator Collins. I think there's a great deal of merit in 
funding two DD(X)s out of the R&D budget so that you could 
develop the manufacturing process in both yards. I look forward 
to continuing to work with you.
    I have a second question that I want to pursue with you, 
Secretary Young.
    When the Navy first awarded the preliminary design 
competition for the DD(X) to Northrop Grumman, the Navy 
committed at that time to having the competition for the next 
stage; the detailed design and initial construction. As you're 
well aware, Bath Iron Works in my State was very much looking 
forward to the opportunity to bid on that construction 
contract.
    Now, I understand that the Navy and the Department have 
decided to go in a different direction and not to have this 
second competition that was originally envisioned and that we 
were counting on. Instead, it's my understanding the Navy 
intends to award to Northrop Grumman the construction contract 
as well.
    I have two questions for you if that is the direction 
you're going in.
    One, if competitors like Bath Iron Works are not going to 
have the opportunity to bid, how will the Navy ensure a fair 
process for allocating the work?
    Second, and very much related to that, specifically if 
we're not going to have the second competition that was 
promised initially, what role do you anticipate Bath Iron Works 
playing in performing this vital work?
    Mr. Young. Senator, I'd like to assure you there was a 
great deal of deliberation in the decision to change the 
acquisition strategy, which I believe has now received approval 
through OSD and would let the lead ship to be built at Northrop 
Grumman Ship Systems. That decision is a change. There are 
multiple reasons for the change.
    I would allude back to something I said to you earlier. At 
the time we had that strategy we had the likelihood of DDGs in 
2006 and potentially in 2007. So, we had a much more robust 
transition and an opportunity to run a competition for that 
lead ship and not let time be the driver. With those DDGs not 
in the budget, the DD(X) as I said, is now critical that it 
stay on schedule.
    Then you begin to assess the time required and the risk of 
that competition. The risk of that competition grows too, 
because I now have a National Team working together in 
partnership; designers at Bath and designers at Ingalls, 
working together to design the ship. Some amount of that energy 
would be diverted into preparing competitive proposals for 
those ships and that competitive process had the potential to 
deteriorate the great team work we have, all of which I need to 
have the best possible chance of keeping the DD(X) on schedule.
    So, we made a hard decision, a carefully considered 
decision to preserve the teamwork and seek to preserve the 
DD(X) schedule, I would argue, for the sake of the industrial 
base in the transition. In doing that, though, I recognize in 
the comments I made earlier that we believe that transition is 
not as robust as it could be. A step that we've discussed is 
making sure both yards are prepared to transition to DD(X) and 
that means both yards need to do some work on the lead DD(X). 
I've discussed this with the lead of the National Team, the 
head of Ingalls. They've indicated that they fully intend to 
provide some initial module work on the lead DD(X) to Bath Iron 
Works and have those initial modules built there so they can do 
exactly what I've talked to you about, and that's begin to 
establish a production practice. We intend for DD(X) to be 
built in a substantially different way than DDGs. That's one of 
the opportunities to reduce the acquisition cost of the ship.
    The positive thing I can tell you is the National Team is 
working together very well and the Ingalls side of the National 
Team intends to use Bath even on the lead ship. Both members of 
the team are prepared to build DD(X) to our current program 
plans.
    Senator Collins. I appreciate that commitment and that 
update. It, obviously, would be unfair if Bath Iron Works is 
not going to have the ability to bid on this contract and then 
does not get a fair share of the work in an uncompetitive or a 
non-competitive environment. So, I think that those assurances 
are absolutely critical to making this work and to justifying a 
decision to skip over the competition for the next stage.
    Thank you, Mr. Chairman.
    Senator Talent. I thank the Senator from Maine. Let me 
follow up.
    I had some questions about DD(X) and LCS. I'll just go to 
DD(X) since we were just discussing that.
    Now, my understanding is that the Navy's estimated the cost 
at $1.2 to $1.4 billion per ship. Is that right, Mr. Secretary?
    Mr. Young. I'd have to----
    Senator Talent. The $2.2 billion, rather--did I misplace a 
numeral there?
    Mr. Young. Well that might be closer to the lead ship cost. 
Then over the class of the ship--depending on what year dollars 
it could be in that range. I think it will be closer to the 
$1.4 billion range over the class in prior year dollars.
    Senator Talent. Yes, I was going to ask, because that range 
seemed to me to be a rather wide range and I was going to ask 
why such a wide range. But you think it's more $1.4 billion 
over the class?
    Mr. Young. Can I offer you some detailed information for 
the record?
    It's a 14,000 ton ship. Today's DDGs are about a $1.1 
billion at 9,000 tons. Tonnage, complexity, the other factors 
will, I believe, guarantee that ship is at least more than the 
$1.1 billion DDGs and I'll get you the precise estimates for 
the record.
    Senator Talent. What I'm getting at, again where the 
Congressional Budget Office (CBO) is at, which is $1.8 billion, 
the cost per ton displaced would put the cost more at $2.2 
billion. Are you comfortable that this is going to come in at 
the cost level you think it's going to come in at?
    Mr. Young. Well, if $1.8 billion is in then year dollars in 
2010, I'd just like to get the inflation factors and tell you 
that answer.
    Senator Talent. Okay. Can you do that for the record?
    Mr. Young. I mean $1.1 billion today in 2004 is probably 
$1.3 or $1.4 in 2010. Then when you add the tonnage and the 
additional systems that are on DD(X) it--the factors--it could 
be a $1.8 billion ship in then-year dollars.
    Senator Talent. Okay.
    Mr. Young. It'd be better, though, for me to get those 
numbers for you for the record, sir.
    [The information referred to follows:]

    Fiscal year 2005 President's budget request for the DD(X) lead and 
follow ships construction:

                                                                  DD(X) PROGRAM FUNDING
                                                                [In millions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   Fiscal Year
                               PB05                               ---------------------------------------------------------------------------- Total \1\
                                                                     2002     2003     2004     2005     2006      2007      2008      2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
RDT&E
 Lead Ship Construction..........................................        0        0        0      103       288       294       353       269     1,307
 Detail Design/Nonrecurring \2\..................................        0        0        0      118       349       252       127        87       933SCN
 Ship Number 2...................................................        0        0        0        0   49 (AP)     2,004         0         0     2,053
 Ship Number 3...................................................        0        0        0        0   49 (AP)     1,493         0         0     1,542
 Ship Number 4...................................................        0        0        0        0         0   49 (AP)     1,729         0     1,778
 Ship Number 5...................................................        0        0        0        0         0   49 (AP)     1,494         0     1,543
 Ship Number 6...................................................        0        0        0        0         0         0   49 (AP)     1,695     1,744
 Ship Number 7...................................................        0        0        0        0         0         0   49 (AP)     1,478     1,527
 Ship Number 8...................................................        0        0        0        0         0         0         0     1,523     1,523
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Additional funding required in fiscal year 2010-2011 to complete construction of lead ship.
\2\ Non-recurring costs include Detail Design, transition to production of ship and mission systems, non-recurring test events, allowance for production
  engineering, special tooling, jigs, and fixtures at the shipyard, arid a greater allowance for change orders.


    Senator Talent. Has a hull been chosen?
    Mr. Young. Yes, sir.
    Senator Talent. Okay.
    Mr. Young. It's a tumble-home hull and we've sized the hull 
through some very deliberative discussions with the 
requirements community at approximately the 14,000 ton level.
    We've made some compromises, sir, to ensure we control cost 
of this ship. The compromises are all over the board from the 
size of the ship to a slightly smaller magazine for gun rounds. 
We changed the rate of fire on the gun from 12 to 10 rounds per 
minute and that made the gun mechanism significantly less 
complicated, less heavy, and less costly. We continue to work 
diligently to make proper cost trades to hold the cost of that 
ship down, sir.
    Senator Talent. Okay. Maybe for the record, you give me 
those in detail?
    Mr. Young. Yes, sir.
    [The information referred to follows:]

         Reduced number of vertical launch missile cells from 
        128 to 80.
         Reduced total gun magazine capacity from 1,200 to 600 
        rounds.
         Reduced rate of fire of gun system from 12 to 10 
        rounds per minute.

    Senator Talent. Now, on the whole issue of the schedule, 
which Senator Collins testified or touched on. I'm worried 
about the industrial-base issues, because we may have a gap 
already as it is at Bath.
    My understanding is that you're going to try a new software 
design tool with DD(X). Is that true?
    Mr. Young. Yes, sir.
    Senator Talent. Are you concerned, given the experience in 
the past with new software design tools, that that might mean 
delay?
    Mr. Young. Sir, I think the one experience that's relevant 
in a lot of peoples' minds is LPD 17.
    Senator Talent. Right.
    Mr. Young. There was truly a new design tool that had 
really not been applied to a warship or a ship of nearly the 
complexity of LPD 17. There were significant growing pains. 
Frankly, the design tool had to be developed and evolved while 
the ship was being designed and that's exactly where you don't 
want to be.
    I think a more relevant example here is the Virginia-class 
submarine which was designed with what I understand to be CATIA 
4. It was fairly effectively used, has shipbuilding capability 
and certainly CATIA 4 has gone through some growing pains to be 
able to be used for Virginia-class. But the Virginia design-
build, the direct translation from design to production has 
worked very well.
    What is intended for DD(X), and this was the subject of an 
Executive Committee meeting where all our industry and Navy 
partners met, is that we will use CATIA 5 for DD(X). Those 
choices reflect the reality that CATIA 4 may not be supportable 
into the timeline we have for designing DD(X). We may get some 
significant benefits in CATIA 5 and then people who have 
trained on CATIA 4 have good skills and can easily translate to 
CATIA 5. In fact I think you'll see potentially even some 
Virginia-class designers helping Bath and helping the National 
Team work on DD(X), but I think we feel comfortable.
    There's always a slight risk, but I think it's not even 
remotely the kind of risk we lived through on LPD 17 given 
CATIA 5s evolution.
    Senator Talent. I'm glad to see you understand the danger 
with a gap to the industrial-base. I was pleased with your 
answers to Senator Collins.
    General Magnus, General Hanlon, I want to make sure you 
guys get involved in this and you knew I was going to ask about 
AGS for DD(X). Are you satisfied with where we're at now?
    General Hanlon. Yes, sir. It is something that I speak 
somewhat frequently with Admiral Nathman and Secretary Young 
about. To answer your question, Senator, right now, yes, we 
are.
    Senator Talent. That it will meet the requirement for the 
Marine Corps?
    General Hanlon. As it stands right now--as I understand it, 
yes, sir, it does. I mean it's the 10 rounds per minute that 
the Secretary talked about. We'll certainly match up with the 
battery equivalent that we use in the Marine Corps for that 
same requirement, yes, sir.
    Senator Talent. You guys continue to believe very strongly, 
don't you, that you have to have fire support from the Navy to 
meet your requirements, and you can't do this with naval 
aviation? You can't do it any other way?
    General Hanlon. Well, sir, I guess I would answer that 
question by saying that the application of fires on the battle 
field comes from--you have to have more than just a single 
capability such as air-delivered. Certainly as marines we do 
depend a great deal on our aviation-delivered fires, and we 
also depend a great deal on our own organic artillery fires. 
But we've always believed that naval surface fire support gives 
us a very important capability, particularly early on in any 
operation in the littorals. When you're in those very difficult 
and tenuous opening hours, opening days of any kind of 
operation where you're actually projecting power, sure.
    Obviously, in World War II if you can go back in history, I 
think it was our naval surface fire support that really ensured 
victory both in Europe and the Pacific and it was used with 
great effect. Quite frankly, with the kinds of capabilities 
that I think that DD(X) in particular will bring with the AGS 
and the kinds of rounds that are being developed for that 
system. I think it will enable us to really reach targets deep 
inland to support, particularly, our deeper ship-to-objective 
maneuver that we'll be doing in the future.
    So, I'm very pleased with it. I think the DD(X) from my 
perspective is exactly the right ship for the right time. I 
think it's going to help meet our requirements quite well.
    Senator Talent. This kind of an exchange just raises the 
whole question that I wanted to go into a little bit in this 
hearing, even with numbers as a benchmark. In other words, how 
far out on a margin of risk do you want to put our marines or 
our soldiers or whatever.
    When you measure the Navy in terms of capabilities you're 
adding a second moving target to that. I'm not saying it's a 
wrong thing to do, I really am buying into this analysis that 
we have to start expanding how we think about naval power. It 
makes all these questions even more indeterminate for you and 
for us.
    That really wasn't a question, it's a comment. Let me do a 
couple more questions on LCS and then, I know Senator Kennedy 
had some more questions that he wanted to ask.
    Senator Kennedy. Senator? One second.
    General Magnus. Mr. Chairman, if I could just add to what 
General Hanlon has said.
    We have worked very intensively with our shipmates, 
particularly, over the last 2 years. Some real experience with 
deep and unexpected combat operations at ranges that, quite 
frankly, the United States and most other powers haven't seen 
for generations. This is clearly a combined arms problem. 
Referenced to earlier discussions about the Littoral Combat 
Ship. Literally, we have to be able to not only get our forces 
from the sea base to the sometimes very deep objectives, but we 
have to ensure that they are shielded as they go through the 
air and sea. So therefore it's a combined arms problem.
    We rely explicitly upon the Air Force to provide certain 
capabilities. This is not just the Marine Corps or just the 
Navy/Marine Corps. So, we have taken a look over time and the 
problem changes over time, the role of naval guns and naval 
missiles. Early on in the fight, as General Hanlon mentioned, 
the role of naval aviation with new aircraft like the Super 
Hornet and the Joint Strike Fighter to come and the new 
precision-guided munitions, persistent surveillance, and 
increasingly capable and, quite frankly, safer weapons. Safer 
for the crews that deliver them, safer for the troops that are 
engaged in close combat on the ground.
    So, we continue to look at this. As we evolve new gun 
systems off new platforms, new command and control and new 
persistent surveillance we're going to see this problem change 
over time, but it remains and we believe it will remain a 
combined arms problem. We work intensely on analysis on this 
because we know these are very important questions for the 
troops on the ground and they're also extremely large 
investment decisions as we move into the future.
    Senator Talent. Well, that's really why I asked it, because 
so many of the recent operations have been very far inland, 100 
miles inland where what you needed is smaller amounts of fire 
support, very precise. What I was asking was have you looked at 
the lessons learned and has that effected your thinking about 
AGS? I hear you telling me, ``Yes, we have looked at the 
lessons learned. We know it's a combined arms type thing.'' But 
you still think we need the fire support of the two guns and 
AGS?
    General Hanlon. Yes, sir.
    Senator Talent. Or DD(X). Yes.
    General Hanlon. Sir, I will tell you, in fact knowing you'd 
probably ask the question, I even brought our lessons learned 
book here, because I'm responsible for collecting that for the 
Commandant. That's what we've been doing from Operation Iraqi 
Freedom. One of the things that we looked at, in fact, was that 
it was more than 100 miles, Senator. In fact, in some cases, 
part of the 1st Marine Division, if you take from the time they 
left the line departing in Kuwait till the time that they got 
to Tikrit was like 500 miles. If either one of you had asked me 
a question a couple of years ago, ``Did you think marines would 
do that?'' I agree with General Magnus, it surprised even us 
that we did that and we were able to do it as well as we did.
    Clearly, in that particular campaign we relied primarily on 
air-delivered and ground-delivered weapon systems. But had we 
been in the position where the operation would have been where 
we could have used a DD(X) type of vessel, particularly early 
on, we certainly would have used those fires. Absolutely.
    I think the thing that's significant about these newer 
systems coming on, Senator, is that they do give us the deep 
reach that we don't have today with our naval surface fire 
support. So, that's why it's important.
    Senator Talent. I know Senator Kennedy has a few more 
questions. I'll go ahead and recognize him.
    Senator Kennedy. Just a couple of areas. General Hanlon, on 
these central themes and your presentation to the subcommittee 
on sea-basing, we're very familiar with the previous Marine 
Corps discussions of operation-maneuver-from-the-sea and ship-
to-objective-maneuver. We're also familiar with the previous 
discussions of such concepts as mobile off-shore basing. So, 
how does the sea-basing concept differ from the previous Marine 
Corps strategies? From the mobile off-shore base concept?
    General Hanlon. Sir, the way we operate today as marines is 
primarily from our L-class amphibious ships and our maritime 
pre-positioning squadrons, and have used them so successfully 
in Operation Desert Storm and in Operation Iraqi Freedom. 
They're great capabilities. Certainly we've seen that. But as 
we looked into the future in talking about a capabilities-based 
force, we just knew that we had to do things differently in the 
future. I thought Admiral Nathman's comment earlier when he 
said something--I think he said, ``Do things more quickly 
before they get out of control,''--was a great comment that he 
made, because this kind of goes to the heart of what I think 
sea-basing is all about. It also touches a little bit, I think, 
on what Admiral Dawson said when he mentioned the example of 
trying to get the Fourth Infantry Division through Turkey and 
the problems we had doing that.
    It is our belief that one of the things that will be very 
important for us to do, we'll have the requirement to move 
combat forces into a theater of operations faster than what we 
can do today. In fact, we're looking at timelines somewhere 
from 10 to 14 days, a brigade size force. To be able to do that 
without having to absolutely depend on airfield or seaports 
given to us or offered to us by someone. We'll be able to use 
the sovereignty and the CNO talks about this all the time; the 
ability to use the sovereignty of the sea to be able to project 
American power where we need to.
    So the sea-basing, I think Senator Kennedy, really 
dovetails very nicely on the previous work we've done with 
expeditionary maneuver warfare. Sir, we've talked to you in the 
past about where we went with operational-maneuver-from-the-sea 
and ship-to-objective-maneuver. In order for us to do that, 
sir, we needed to have a foundation. The foundation was this 
new sea-basing concept, which is something that both the Navy 
and the Marine Corps are fully committed to.
    So that's what we're working on right now. It is a 
significant change, sir. I mean it really is a significant 
change, because it will enable us for the first time, really to 
marry up these pre-positioning ships of the future with our L-
class ships while we're at sea. Be able to actually receive 
marines or other joint troops at the sea-base, actually have 
them fall in on their gear, actually have them go to the 
objective that they're going to assault. Be able to sustain 
them from that sea-base and to be able to bring them back to 
re-calibrate and re-cock them for further operations. That's 
something we cannot do today, sir.
    We just feel that in the future, particularly with the 
emphasis on force protection, that this becomes something 
that's very important. Did that answer your question?
    Senator Kennedy. Yes. I think that's very interesting. I 
think that you're looking over Iraq now and this enormous 
transition that's going to take place and the gathering of 
these troops in these kinds of areas and the vulnerability that 
they were going to have, and security issues. I mean that seems 
to be an attempt to try and deal with some of those kinds of 
issues. Which I think probably makes a great deal of sense.
    General Hanlon. Yes, sir.
    Senator Kennedy. Let me just finally ask about the 
industrial base, Secretary Young. At the posture hearing 
Secretary England said that, ``The updated surface combatant 
industrial base study was finished. The Navy will be ready to 
brief the study later this week.'' Well, today is later in the 
week. [Laughter.]
    Senator Kennedy. Is there anything you can tell us about 
the results of the Navy's latest look at the health and 
prospects for the surface combatant industrial base?
    The previous study said that, ``The two ship yards, Bath 
and Ingalls need three DDG-51s per year, plus additional work 
to remain viable.'' The shipbuilding plan for 2006 shows no 
DDGs and no DD(X) in fiscal year 2006. So, I suppose we're 
going be interested in what's going to happen.
    Mr. Young. Yes, sir. If the Secretary said it will be 
briefed this week, it'll be briefed this week. [Laughter.]
    I have a draft of it here, it's in final signature process 
and I think we will get it out. I'll tell you that the study 
says much along the lines of what we discussed today. That is 
that the transition has the potential to negatively impact 
workload at the surface combatant yards. That the transition--
we believe we can confidently manage the DDG, the DD(X) 
transition it is critical for the DD(X) program to stay on 
schedule to support that transition.
    Senator Kennedy. I know there will be a lot of interest in 
that and we'll have a chance to, I'm sure, go into that in 
greater detail down the line.
    Mr. Young. Yes, sir.
    Senator Kennedy. I thank you, Mr. Chairman. It was very 
interesting, very helpful. I thank our panel.
    Senator Talent. I have a few questions, also. Let me go 
ahead and take care of my questions regarding the CH-53X. I 
guess this would be for General Magnus.
    Evidently, as I understand it or as you were looking at a 
service-life extension program (SLEP) or a remanufacture 
program for CH-53 you're now going to build a new CH-53 with a 
mix with MV-22s. It's going to be, as I understand it, a 76 
percent to 24 percent mix of MV-22s to CH-53. Is my 
understanding basically correct?
    I'm kind of hanging on by my fingernails, so tell me if I'm 
going to fall off or not here.
    General Magnus. The exact mix is something in our study now 
and we'll study over time particularly with lessons learned, 
Mr. Chairman, from OEF and OIF where we found ourselves not 20 
years in the future but in the here and now projecting larger 
forces, deeper in sustained operations. So, again, we continue 
to reflect just like with the naval fires, what does this mean 
about our previous plan about the mix? Quite frankly, the 
capability and the affordability of these different mixes.
    But, Mr. Chairman, you're correct. We have taken a look at 
the CH-53 program and Mr. Young may wish to offer some comments 
on top of that.
    But we've looked at essentially remanufacturing which takes 
the given number of airframes that we have and we've already 
retired our first CH-53s into the desert, because of the life 
on the airframe. So, before we could actually get into a 
SLEPing the few that we have then the numbers decline due to 
peace-time attrition. We find that those airframes have to be 
SLEP'd by 2012 but the numbers will continue to decline.
    So SLEPing them, even with improved rotor heads, improved 
electrical hydraulic systems, potentially new engines, taking a 
look at the cost of that given that the inventory steadily and 
relentlessly declines and yet we see an increased requirement 
for heavy lift helicopters, the V-22 completely replacing in a 
literally transformational way, the CH-46. Things like KC-130s 
because of the deeper operations we realize that the numbers 
are not there to sustain even a remanufacture program.
    So, we have to go forward in the acquisition process to be 
able to get the appropriate approvals for the consideration of 
putting not the old CH-53 but a new CH-53 potentially back into 
production.
    Senator Talent. Okay. So, you're not committed to anything 
like, at this point, a three to one mix of MV-22 and CH-53, or 
is that where you think you're headed?
    General Magnus. That is approximately the mix if we were to 
sustain the present force structure and transition CH-46s into 
MV-22s and CH-53s into the CH-53Xs. But as I said, Mr. 
Chairman, it's not like we're coming up with dramatic 
surprises, but the pressure on Marine aviation has made us much 
more sensitive to the need for vertical lift. Not only from 
sea-basing but vertical lift just to sustain operations ashore. 
This has become in the last 1 to 2 years a very important and 
daunting realization on the part of our shipmates and us in 
terms of what kind of platforms do we need at sea to support 
what kind of aircraft to project and to provide a persistence 
to the forces as they operate, sometimes very deep and very 
relatively high intensity operations. Although, they're not 
necessarily the kind of operations we foresaw 20 years ago.
    Senator Talent. All right, well I'm interested in your 
analysis supporting the mix when you've completed that. It 
sounds like it may be premature; you're headed there but you're 
not there yet. I would be interested in it.
    General Magnus. Mr. Chairman, we will provide you some 
additional information for the record.
    [The information referred to follows:]

    The current Marine Corps Aviation Plan (AVPLAN) proscribes 22 MV-22 
squadrons with 12 aircraft each (2212=264 aircraft). We are 
converting 15 active duty CH-46 squadrons, 3 active duty CH-53D 
squadrons, 2 Reserve CH-46 squadrons, and 2 Reserve CH-53E squadrons.
    The AVPLAN also plans for 6 CH-53X (now Heavy Lift Replacement 
(HLR)) squadrons of 16 aircraft each (616=96 aircraft). This 
will convert six active duty CH-53E squadrons to HLR squadrons.
    This produces a ratio of 264:96, or 2.75:1. Note that these numbers 
of aircraft are less than the total procurement objective for both MV-
22 and HLR; they do not include aircraft needed to account for the 
Fleet Replacement Squadron (Training Squadron), pipeline aircraft, 
attrition, HMX, or Developmental/Operational Test.
    The total numbers of aircraft, as outlined in the Programs of 
Record, needed to support Marine Corps requirements are based on 
numerous studies and analyses done by both internal departments and 
external agencies/companies.

    Senator Talent. Okay. Thank you. Does the fiscal year 2005 
budget request reflect the decision to acquire new build CH-
53X?
    General Magnus. The President's fiscal year 2005 budget 
does not.
    Senator Talent. Does not reflect that decision, because 
you're not quite there yet? Okay.
    General Magnus. That decision is still being worked within 
the process of requirements and acquisition.
    Senator Talent. Okay. On LCS, Admiral Nathman and Secretary 
Young, let me get in the cost issue here, because I think 
Admiral Nathman you said, ``$250 million, $260 million,'' 
that's where you think the ship is going to come in and that's 
the frame and the modules? Did I understand that right or 
Secretary Young if you--who ever wants to answer this.
    Mr. Young. I tell you we've set a couple of different 
targets. One is that the objective cost range for the ship is 
$150 to $220 million and we'd like to be in the low end of that 
range.
    Senator Talent. Is that for the ship or the frame?
    Mr. Young. For just the sea frame.
    Senator Talent. The frame, yes.
    Mr. Young. Then over some reasonable average procurement 
unit cost we'd like the ship with the modules to cost about 
$250 million. Those are goals we've set for ourselves.
    Senator Talent. Okay. Well, this is kind of what I'm 
talking about, because we didn't really do an analysis before. 
Contradict me if I'm wrong, but before we made the decision to 
go with LCS as opposed to some other way of meeting the 
requirements, we didn't do all that thorough an analysis. My 
gut is that you're absolutely right with this program. I have 
been supportive of it.
    Mr. Young. Yes, sir.
    Senator Talent. But we didn't do the analysis then and now 
it sounds to me like you're saying, ``You'd like it to come out 
at a certain point,'' but what we need, don't we, is an 
analysis of how much the modules are going to cost to do what 
we're requiring them to do.
    Mr. Young. Yes, sir.
    Senator Talent. So, are you getting the cart before the 
horse in figuring out what number you want before you do the 
analysis?
    Mr. Young. Well, we have identified what we think is the 
composition of the first three core modules if you will. Mine 
Warfare, ASW, and a Submarine Warfare and then the Surface 
Warfare Module. Those module prices incorporate largely 
existing systems from Fire Scout to RMS, the AQS 20 to RAMICS, 
et cetera. So, we can cost those out with some precision today 
and the very first modules we have a piece of paper we can 
provide to you for the record that suggest those modules, I 
think the Mine Warfare Module would cost on the order of $135 
million today. The Surface Warfare module might cost in the 
order of $45 to $50 million today. Those prices, the rates will 
go down if the lead ship with the lead module in the worst case 
would be $220 million plus $130 million would be $380 million. 
But if the ship comes in at $150 million and the module is $130 
million, we're close to our $250 million and we're going to try 
hard to work to that goal.
    [The information referred to follows:]

    The projected cost of the three Flight 0 mission modules (Mine 
Warfare (MIW), Anti-Submarine Warfare (ASW), and Surface Warfare (SUW)) 
are as follow:

        MIW Module: $132.9 million
        ASW Module: $89.6 million
        SUW Module: $46.2 million

    Senator Talent. Some of the modules are going to cost a lot 
less than the $130 million?
    Mr. Young. That's the highest priced module based on our 
current estimate and configuration, $130 million, and that 
price at volume or at a higher rate of procurement will come 
down.
    So, I think the goal is well within reach, reasonably set. 
It will force continued discipline on the system which is 
healthy.
    Senator Talent. Okay. This is the first time I've heard the 
$250 million figure. So, the total cost of the program, of 
course adjusted and everything, will be 65 times that.
    How many modules do you anticipate you're going to need?
    Mr. Young. Maybe I should make sure Admiral Nathman has a 
chance to comment on that.
    In our program of record in the near term, through 2007, we 
have budgeted funds to buy four ships and seven modules. Then 
we're going to keep working through the operational doctrine to 
tell us exactly what the right quantities of each set of 
modules; mine warfare, ASW, and surface warfare, as well as the 
proper ratio per ship to accomplish the mission.
    Senator Talent. Would you anticipate that the total number 
of modules will be in that same ratio as in the first five--
seven to four or do you know?
    Admiral Nathman. I'll try and address that one, sir.
    Let me give you just a kind of a quick example. Suppose you 
had significant warfighting mine clearance issue with your LCSs 
and they were forward. You might have five of them forward in 
your squadron. You may chose to have one LCS run the TUAVs that 
are looking for the mines because that might be a more 
efficient way to look at it. While the other LCSs are actually 
using the surface and the unmanned vehicles as part of that 
mine module total capability.
    So, you may be better off in terms of distributing those 
modules inside those capabilities over those numbers of LCSs in 
that squadron. So, you wouldn't necessarily outfit each 
squadron. So, I think what we're into right now is detailed 
work about the proportionality of the modules per LCS, the 
ratio, as well as what's the best way to have those things pre-
positioned or to go forward. In some cases we believe strongly 
that a lot of the helicopter equipage, which is a follow-on to 
the MH-60, will now go on to LCS.
    So, I think we have to get into some of those details. If I 
could reclaim my number a little bit there, I was trying to 
indicate where we felt the costing of these modules might go. 
Secretary Young's point, we understand a lot of these things 
are current capable capabilities that we have in terms of RMS. 
So we can price them quite well. But there is a potential to 
understand that if you saw an opportunity to change the 
persistence of a particular module whether making smaller 
investments and say its engine or its payload capacity, that 
might be a very wise investment. So, there's got to be some 
liquidity, I believe, in this investment.
    Senator Talent. Well, I agree. I'm trying to be as 
sympathetic as I can, but I mean we're talking about a new 
ship, a new platform. We didn't have the analysis before.
    Admiral Nathman. We have it now.
    Senator Talent. We're not sure how many modules we're going 
to get. You just mentioned the MH-60s, have you determined how 
that's going to effect that inventory, whether we're going to 
need more of those?
    Admiral Nathman. That was the idea. Sir, we basically 
already arrived at that, because we had the helicopters forward 
but they lily pad, as it were, to the LCS.
    Senator Talent. We have a very aggressive acquisition 
schedule, and I appreciate decisiveness. Now the cost is pretty 
liquid as well, and we have to have something to go by when we 
authorize these programs.
    So, at a certain point, and I would like it to be sooner 
rather than later, we're going to have to start getting some 
fixed numbers on some of these issues. With an understanding 
that in the course of when you do your lean manufacturing 
techniques and you take advantage of technology in the course 
of building these ships that that number may come down or you 
may want to make some variations. We just need to come to some 
kind of an agreement for how we can do some oversight on this 
that still allows you the flexibility you need to make this 
ship as good as it can be.
    Mr. Young. Could I offer a couple of comments?
    The demand for these ships is pretty substantial.
    Senator Talent. Right.
    Mr. Young. We have three ships under lease that are smaller 
versions or comparable in capabilities to what we seek in LCS. 
I think the Marine Corps would say they've been wildly 
successful. The Fleet Forces Command and Admiral Fallon would 
say similar things. So, the demand and the push on the 
acquisition system is there, we would like to change how we do 
business and the fleet is asking for these assets. Those assets 
that have been leased are easily costed in an open marketplace 
at approximately $100 million. So, we believe that $150 million 
target is very achievable.
    We're in source selection on LCS right now, so we should, 
by the end of May, sir, be able to tell you what LCS or LCSs we 
want to buy. We're going to be able to offer you great fidelity 
to the discussion you want to have with us.
    Senator Talent. Let me just ask you about something that 
came in this afternoon, you have two items relating to LCS; the 
TUAV and the modules a $48 million item and a $74.7 million 
item on the unfunded priority list. Are you familiar with that?
    Admiral Dawson. The CNO's list, sir?
    Senator Talent. Well, it is the CNO's unfunded program, I'm 
sorry. I'm just wondering why anything on this ship is on the 
unfunded priority list given the the importance of and the 
aggressive acquisition schedule. Can you tell me what I'm 
talking about, Admiral Dawson, or could somebody?
    Admiral Dawson. The CNO wants to be as aggressive as he can 
with this concept and he sees as an opportunity to get ahead of 
our CONOPs problem by putting these modules out there to 
improve the flight-zero demonstration and CONOPs validation. So 
why not take the opportunity to, since we're going to have the 
flight-zero ships, why not get the modules on there and get 
ahead of that particular problem.
    Senator Talent. These weren't funded. These are on the 
unfunded list.
    Admiral Dawson. Yes, sir.
    Senator Talent. For 2005?
    Admiral Dawson. For 2005, yes, sir. He saw this as an 
opportunity to try and do this faster.
    Senator Talent. Yeah, well I don't understand why it would 
be on the unfunded priority list then.
    Mr. Young. Sir, in the interest of information exchange, 
what's funded in 2005 is the mine-warfare module, which is one 
of the highest priorities. In 2006 we have the first ASW 
antisubmarine warfare and surface warfare module.
    Senator Talent. Okay.
    Mr. Young. I think what you'd be seeing given the CNO's 
testimony to the subcommittee, I think even yesterday that he 
wanted this, or this capability ``tomorrow morning'' as he 
would like to pull the ASW and SUW modules forward.
    Senator Talent. I see what you're saying. Your saying if we 
don't get it in 2005 it will be on the 2006 funded priority. 
So, that's why you were saying he's moving it up.
    Mr. Young. It is budgeted in 2006, sir.
    Senator Talent. Hopefully, he can get it anyway. I got it. 
All right.
    Admiral Dawson. What you'll see on that unfunded list are 
those things that as we put together our program we just didn't 
have the resources to get to. You'll see them next year.
    Senator Talent. I get you. You're hoping to sneak it in 
putting it on the unfunded priority. I get you. Well, we'll see 
what we can do about it.
    Mr. Young. Sir, I support the President's budget. I 
absolutely understand. [Laughter.]
    Senator Talent. Let the record show the witnesses made no 
response to the comment that I made.
    Do we need prototypes, prototype squadrons with LCS, are 
you thinking along those lines to make certain that they'll 
perform the way you want them to perform? Have your tests to 
this point been adequate? What do you think?
    Admiral Nathman. Where we are right now, sir, there is a 
strong fleet linkage in this concept of sea trial of developing 
the deployment concept for the size of those squadrons. The 
proportionality of what's forward and what's in the rear. One 
of the views of LCS is we should deliver a high availability, 
these should come with a high availability. They should be able 
to stay on scene for some time. It would be a mistake to have 
these go back and forth across the Pacific Ocean frequently. 
One, it's going to drive down the utility of the ship, it's 
going to eat up hull life, so why not have them forward as much 
as we can.
    Senator Talent. Yes.
    Admiral Nathman. So, we're kind of pinning around this 
concept of keeping them forward, keeping them ready to go and 
then putting them in terms of pre-cursor ops in front of the 
Carrier Strike Groups and Expeditionary Strike Groups to shape 
the battle spaces that needs to be shaped. In some cases 
prepare the battle space in terms of intelligence and other 
cases actually do mine-warfare clearance or ASW precursor ops, 
those kinds of things which lead the striking group.
    So, that's the connection of Littoral Combat Ship to our 
total force. It isn't just out there to be by itself. It's a 
very coherent look at how the ship--how that then leads to some 
basing concepts of being forward and in the rear. Do you want 
those ships in the rear to act as a training squadron--but some 
ought to be there, obviously, to replace, because some of these 
are going to have to come back for their availabilities and 
repair. In some cases like we see on all our ships, some 
overhauling that provides for the sustainment of the force.
    So, that right now we're doing strong analytic work in 
terms of proportionality, but also dealing with Fleet Forces 
Command and our experimenter, the Navy Warfare Development 
Command up in Newport, Rhode Island to get this concept pinned 
down.
    So, I think we're awful close on that, and we have a lot of 
contributors that you would expect from the different fleet 
agencies to make sure that we have this concept right. But we 
see it forward with a certain proportion of LCSs----
    Senator Talent. So in view of this work you're doing now, 
you don't think you need prototype squadrons?
    Admiral Nathman. I think when they go forward, they're not 
going to be proto-typical. So, I think they're going to do real 
work.
    Now, you're going to learn a lot in the spiral of your 
demonstration and some experimentation, but the compelling need 
is there. So, we feel like they should go forward and so why 
slow down?
    Senator Talent. Okay.
    Admiral Nathman. You can learn as much by being forward as 
you can by doing a lot of testing in the rear. So, I think 
we're--we'd be comfortable--I'm probably setting policy for the 
CNO, but I believe we would know that we need to be forward 
with these and where we'd learn more about those ships.
    Senator Talent. Enough good thinking beforehand and having 
worked with the groups they'll be attached to so you don't need 
it.
    Yes, Secretary Young?
    Mr. Young. I'll join Admiral Nathman by going out on a limb 
here and tell you that I think this is analogous to what we are 
doing with the Marine Corps right now. We have a team, we've 
dubbed it ``Operation Respond.'' We have a war council with 
General Hanlon that is seeking to identify tools, technologies, 
and systems that can support the Marines so they are effective 
and safe in Iraq. If we see something that can be deployed and 
that they're willing to take with them, we're putting it there 
with them.
    It is Secretary England's first priority. He's willing to 
get field experience with systems. I think the CNO is with him. 
We have the two leased high-speed vessels (HSVs) that are doing 
LCS like operations right now, so we are beginning to inform 
ourselves on the CONOPs and the capabilities. The Marines are 
working with a leased ship in the Pacific using it in a 
slightly different way, more logistically. But all those pieces 
of information are informing the CONOPs that Admiral Nathman is 
building and I think lead all of us to feel like two things; we 
will do more experimentation. We may do some of that 
experimentation at home, but the capability is so useful to us 
we would have these ships doing maritime interdiction in Iraq, 
in the Persian Gulf, right now if we had them.
    Admiral Dawson. Senator, if I could?
    Senator Talent. Go ahead.
    Admiral Dawson. I'd like to add to that having just come 
last year from Norfolk with Second Fleet, we were very excited 
down there that we'll get one of these LCSs. We'll integrate it 
with our Carrier Strike Group and the training and the 
operations that we're doing. Then we'll unleash the genius of 
our people and we're going to discover things that even with 
the prototypes that we had we never thought of before. As soon 
as we get them that will be unleashed. That's what the CNO 
wants to get them.
    Senator Talent. Well, let's just hope we can get from here 
to there without any major problems we can't overcome.
    There's a vote on. I've basically finished my questions. I 
will probably have some questions I can submit to you, General 
Magnus, on the expeditionary fighting vehicle (EFV) and some 
issues there. I covered most of what I wanted to. Thank you all 
for your time. We all appreciate it so much, as well as your 
service to our country.
    The subcommittee is adjourned.
    [Questions for the record with answers supplied follow:]
            Questions Submitted by Senator Edward M. Kennedy
                        mine warfare capability
    1. Senator Kennedy. Admiral Dawson, at the hearing I raised the 
issue of the cut in steaming days for mine hunters in the fiscal year 
2005 budget request. In prior years, the Navy funded mine hunters to 
conduct 28 days of training per quarter. This budget reduces that 
training to a level of 18 days per quarter. You indicated that more 
training will be accomplished by using simulations. Could you identify 
what new simulation capability or other training enhancements will 
allow these important forces to maintain readiness to exercise this 
important, perishable capability?
    Admiral Dawson. Mine Warfare is looking at more efficient ways to 
train our sailors in order to both save money and maintain readiness 
levels. Pier side training and taking advantage of the classrooms and 
simulators available at the newly expanded Mine Warfare Training Center 
will be fundamental in helping us maintain readiness.
    Within Navy schoolhouses, new Mine Warfare simulation capability 
and training enhancements that will exist by 2005 include the AN/SQQ-32 
(V2) and (V3) variable depth minehunting sonar system simulator. This 
provides introductory and component level systems training for the 
Mineman enlisted rating. The simulator is located at the Mine Warfare 
Training Center, in Ingleside, TX, and will train approximately 80 
personnel annually. There are four different Navy Enlisted 
Classifications (NEC) associated with this training. This training also 
has the potential to be used as a fleet asset for ``just in time'' 
training as well as for refresher skills training.

                        guided projectile delays
    2. Senator Kennedy. Secretary Young, 3 years ago the Navy was 
projecting that the extended range guided munition (ERGM) program would 
achieve initial operational capability (IOC) in fiscal year 2004, a 
slip of some 2 years from the original goal. Two years ago, the Navy 
informed the subcommittee that ERGM will achieve IOC in fiscal year 
2005. Now this year, we are told that ERGM will not achieve IOC until 
fiscal year 2008. Why should the subcommittee have any confidence that 
the Navy and the ERGM contractor team can meet this new schedule to 
deliver this important capability to the fleet?
    Mr. Young. Until recently, the ERGM program was schedule driven, 
which did not allow adequate time to address technical problems 
identified during testing. That approach, using strict schedule 
adherence, is no longer the standard ERGM operating process. The 
current proposed program plan for continuation of flight tests provides 
additional schedule margin to allow time to address technical issues. 
We will not field the ERGM round until it is fully tested.
    For the most part, the ERGM design has been demonstrated to work 
during testing. A few remaining technical problems were identified 
during the last round of flight tests. Solutions to recent ERGM flight 
test technical problems have been identified and are being implemented. 
A rigorous engineering test and evaluation approach has been developed 
to resolve these design deficiencies and validate the corrective 
actions. Prior to proceeding with flight tests, a series of laboratory 
and component level gun launch validation tests are being performed to 
verify technical solutions. Using this new methodology, more subsystem 
components will be subjected to validation testing to provide higher 
confidence levels prior to the next set of flight tests.

    3. Senator Kennedy. Secretary Young, what, if anything, do the 
continuing ERGM problems tell us about the risk for fielding the 
projectile for the advanced gun system in the DD(X) on time?
    Mr. Young. What we learned from the ERGM program is the importance 
of mitigating risk at every step of the development process for 
fielding new ordnance. The Navy has implemented this philosophy as we 
develop the Long-Range Land Attack Projectile (LRLAP), which will be 
the principal round for the Advanced Gun System (AGS) aboard DD(X). The 
LRLAP schedule provides for significant subcomponent build and test, 
iterative build and test of the guided flights, and time to correct 
problems should they arise. The LRLAP schedule also includes a land 
based test plan that completes 3 years prior to DD(X) IOC. We also 
reduce overall risk by building the projectile, magazine and the AGS 
from the ground up. Unlike ERGM, where the projectile had to be 
designed to fit an existing gun system, LRLAP, magazine and AGS designs 
can be modified to reduce risk, improve overall system design, and 
increase reliability.
                                 ______
                                 
                Questions Submitted by Senator Jack Reed
                               submarines
    4. Senator Reed. Secretary Young, Admiral Nathman, and Admiral 
Dawson, there are two less submarines between fiscal year 2007-fiscal 
year 2009--how do you intend to get these subs back?
    Mr. Young, Admiral Nathman, and Admiral Dawson. The 1999 Chairman 
of the Joint Chiefs of Staff (CJCS) Attack Submarine Study, which 
supported the 2001 Quadrennial Defense Review, identified that a 
minimum force level of 55 attack submarines is required to ensure the 
combatant commanders maintain sufficient capability to respond to 
urgent crucial demands without gapping other requirements of high 
national interest. The current build rate falls short of supporting 
that number. The Office of the Secretary of Defense is currently 
evaluating SSN force structure and build rate issues and will report 
their recommendations later this year.

    5. Senator Reed. Secretary Young, Admiral Nathman, and Admiral 
Dawson, you estimated that repairs to the U.S.S. Hartford would cost 
about $9.4 million. Will this unexpected cost impact any of your other 
programs?
    Mr. Young, Admiral Nathman, and Admiral Dawson. At this time we do 
not anticipate this cost to impact any program outside of Ship Depot 
Maintenance. The repairs to U.S.S. Hartford are now completed at an 
actual cost of $6.917 million.
    The ship maintenance budget contains provisions for emergent repair 
requirements, determined by historical costs and actual operating 
months for each ship class. The impact the Hartford will have on ship 
maintenance is dependent on what other emergent repairs develop during 
the remainder of the fiscal year. If other emergent repairs exceed the 
amount available, other maintenance work could be deferred.

    6. Senator Reed. Secretary Young, Admiral Nathman, and Admiral 
Dawson, what is and will be the submarines role in intelligence, 
surveillance, and reconnaissance (ISR)? How vital is it?
    Mr. Young, Admiral Nathman, and Admiral Dawson. The submarine is an 
essential resource in our Nation's ongoing ISR efforts. The covert, 
persistent nature of submarine platforms provides warfighting 
commanders with the access and dwell time necessary to conduct the 
long-term ISR of potential adversaries. It is this persistent ISR that 
will provide us with the intelligence preparation of the battlespace 
(IPB) needed to prevail in future conflicts. Additionally, the 
submarine uniquely provides the ability to survey the undersea domain 
in littoral areas. As we have seen in recent conflicts, the dependence 
on maritime provisioning and the need to project power into the 
littoral maritime environment requires unprecedented IPB in this area 
to combat the assymetrical threats posed by submarines and mine-laying 
operations.

    7. Senator Reed. Secretary Young, Admiral Nathman, and Admiral 
Dawson, in your opinion, how many submarines are needed for the ISR 
mission?
    Mr. Young, Admiral Nathman, and Admiral Dawson. Submarines are 
multi-mission platforms that satisfy a number of combatant commander 
critical mission requirements of which ISR is a part. The 1999 CJCS 
Attack Submarine Study, which supported the 2001 Quadrennial Defense 
Review, identified that a minimum force level of 55 attack submarines 
is required to ensure the combatant commanders maintain sufficient 
capability to respond to urgent crucial demands without gapping other 
requirements of high national interest.

              research, development, test, and evaluation
    8. Senator Reed. Secretary Young, the Navy's justification for 
reducing the naval force was based on the increase in new technology 
that calls for less manpower. Is a $1.4 billion increase in research, 
development, test, and evaluation (RDT&E) enough to move from legacy 
equipment to the next generation of combat power?
    Mr. Young. Most of our RDT&E funds are tied to acquisition programs 
of record whose purpose is to move us to the next generation of combat 
power. The fiscal year 2005 request fully funds these RDT&E programs to 
achieve their targeted next generation capabilities. In addition, the 
fiscal year 2005 request includes $1.7 billion for science and 
technology programs that will move us toward advanced combat power for 
the generation after next.

                          littoral combat ship
    9. Senator Reed. Admiral Nathman and Admiral Dawson, the Littoral 
Combat Ship (LCS) is being planned to have interchangeable mission 
modules. What are the benefits of these modules?
    Admiral Nathman and Admiral Dawson. Interchangeable and 
reconfigurable mission modules are beneficial from both operational and 
life cycle cost perspectives.
    From an operational perspective, modular mission packages give the 
Joint Commander maximum capability and flexibility. They offer maximum 
capability because each LCS ship, when fitted with a given mission 
package, will contain more advanced technological assets to bring to 
bear in a particular warfare area than would be possible with a multi-
mission ship fulfilling the same mission. An LCS ship configured to 
perform ASW, for example, will carry a remote MH-60R helicopter, three 
Vertical Take-Off Unmanned Aerial Vehicles, an Unmanned Surface Vehicle 
and an unmanned underwater vehicle (both equipped to search for 
submarines), and other ASW equipment.
    Modular mission packages allow maximum flexibility because the 
Joint Force Commander can change the focused mission of each LCS based 
upon changing requirements in theater. To change the focused mission of 
an LCS ship, a modular mission package and a team of mission 
specialists to support that package are sent to the ship. Within just a 
few days, the focused mission of this ship has changed to match the new 
threat. With LCS, a single ship can bring an unprecedented capability 
in a particular warfare area--Mine Warfare, Anti-Submarine Warfare or 
Surface Warfare--and can change that focus rapidly as theater 
requirements evolve.
    A ship that conducts only one focused mission at a time can be 
smaller in size (and therefore less expensive to construct than a 
larger multi-mission combatant). Moreover, since mission packages would 
be shared among all the LCS ships in the fleet, we need only procure 
that number of mission packages needed to meet anticipated theater 
threats. For example, instead of buying an ASW suite for every surface 
combatant in the fleet, with LCS, we need only buy a fraction of the 
total force of LCS ships. (The precise number of mission packages to be 
procured is part of the Force Structure Studies currently being 
undertaken by the Navy).
    The old paradigm of a fleet of large multi-mission surface 
combatants, each equipped and manned to fight a number of warfare 
areas, is swept away by a new concept: Plug in the mission you need, 
with the mission specialists required, to meet the threat faced by the 
Joint Force Commander.

    10. Senator Reed. Admiral Nathman and Admiral Dawson, how and where 
will the modules be changed?
    Admiral Nathman and Admiral Dawson. For LCS Flight 0, mission 
packages will be changed in port. This port could be in the Continental 
United States, or anywhere overseas where our ships normally make calls 
into port. A crane is the only off-ship equipment required to handle/
change mission modules. A threshold value of 4 days time for Mission 
Package Change Out is required for Flight 0; the objective is 1 day.
    For LCS Flight 1, our eventual goal is mission module change-out 
capability at sea. This will be accomplished by continuing to drive 
toward common unmanned vehicles that are inherent to the ship and do 
not change with mission packages. Since these vehicles are the largest 
part of each mission package, this would greatly reduce the amount of 
equipment requiring movement during a mission package change-out 
evolution. We are also looking at sensors and weapons that require 
smaller footprints. These efforts will greatly improve staging and 
change-out options, including the use of current Underway Replenishment 
Ships, MPF(F), and Carrier Strike Group/Expeditionary Strike Group 
ships.

    11. Senator Reed. Admiral Nathman and Admiral Dawson, are you 
considering whether Military Sealift Command ships can be fitted to 
carry the modules?
    Admiral Nathman and Admiral Dawson. Yes. For Flight 0, we have 
evaluated numerous transportability requirements for the LCS modules 
including use of Military Sealift Command (MSC) ships. MSC and other 
ships that can handle a 20-foot standard container can support LCS 
mission modules. For Flight 1, we are working to develop common 
unmanned vehicles that remain on the sea frame and do not change with 
mission packages. Our goal is to develop sensors and weapons with 
reduced footprints, in order to allow for their movement via all 
underway replenishment ships, including MSC ships.

                  maritime prepositioning future force
    12. Senator Reed. General Hanlon, what capabilities does the 
Maritime Prepositioning Future Force (MPF(F)) provide that you do not 
have today?
    General Hanlon. The envisioned capability improvements of MPF(F) 
will allow the Navy-Marine Corps team to provide up to three Marine 
Expeditionary Brigade sets of prepositioned warfighting capabilities to 
unified combatant commanders to meet mission requirements, from the sea 
without reliance on host nation support.
    The Maritime Prepositioning Force has demonstrated that it is a 
significant capability and has grown to become one of the key elements 
of our Nation's maritime forward presence strategy.
    Anticipating that access denial will continue to be a critical 
determinant for overall strategic decisionmaking, actions conducted at 
and from the sea, that have been traditionally conducted in host nation 
ports/airfields, will substantially enhance our Nation's response 
options.
    MPF(F) will continue to provide essential prepositioned supplies 
and equipment to our combatant commanders. Moreover, it will be an 
integral part of a sea-based operational environment that promotes 
significantly enhance interoperability among elements of the sea base.
    Those elements include the Carrier Strike Group, Expeditionary 
Strike Group, Maritime Prepositioning Group, Combat Logistics Force, 
and other maritime forces. Those ``other forces'' can appear in several 
forms including an Amphibious Force/Marine Expeditionary Brigade, U.S. 
Army flotilla force, or afloat coalition forces.

    13. Senator Reed. General Hanlon, what is the relationship between 
MPF(F) and amphibious platforms? Why is it critical that you retain 
both?
    General Hanlon. While it is important to draw the distinction 
between the MPF(F) and amphibious shipping, it must be emphasized that 
they are two distinct entities possessing individual capabilities yet 
inextricably linked to each other. In our view, MPF(F) and amphibious 
shipping are neither interchangeable nor competing platforms. Our 
Nation's anti-access strategy requires both capabilities. Amphibious 
ships use the sea as maneuver space in support of forcible entry 
operations and enable embarked forces to remain at sea for extended 
periods to conduct forward presence missions.
    Amphibious assault ships embark, deploy and employ maneuver forces 
for conducting forcible entry operations in non-permissive 
environments. They provide critical capabilities; the ``big deck'' 
amphibious ships are the centerpiece and principal MAGTF C2 and 
aviation support platforms.
    MPF(F) is a transformational component forming the back bone of a 
future sea base. MPF(F) supports crisis response thru prepositioning of 
equipment and sustainment, enabling the closure of up to a MEB sized 
force onto a squadron of ships designed to be more operational than the 
ships we have today, but not to the extent of our amphibious fleet. 
MPF(F) will be designed for early force closure, amphibious force 
interoperability, sustainment, and reconstitution and redeployment--
from a sea base.
    The synergistic effect of MPF(F) and amphibious platforms is a core 
capability of the seabase that must be maintained. Together they 
provide a littoral presence and power projection capability without 
rival.

    14. Senator Reed. General Hanlon, what are the top three components 
required to make seabasing a reality?
    General Hanlon. As the core of Naval Transformation, seabasing will 
provide the operational and logistical foundation to enable the other 
pillars of Naval Transformation, namely Sea Strike, Sea Shield, Sea 
Base, and FORCEnet. These components are key to making seabasing a 
reality.
    Seabasing, envisioned as a national capability, is our overarching 
transformational operating concept for projecting and sustaining multi-
dimensional naval power and selected joint forces at sea. As stated by 
the Defense Science Board in its August 2003 Task Force report: 
``Seabasing represents a critical future joint military capability for 
the United States.''
    From a more functional perspective, force closure/arrival and 
assembly, sustainment, and reconstitution and redeployment are three of 
the key components that need to be developed to make seabasing a 
reality.

          Force closure/arrival and assembly pertains to closing the 
        force to the platforms with prepo'd equipment and making them 
        combat ready.
          Sustainment includes the ability of the seabase to receive, 
        manage, and distribute required resources seamlessly. Selective 
        offload is a key component of the onload and offload of 
        maritime prepositioned equipment and supplies in support of 
        general purpose forces.
          Reconstitution and redeployment allows for the recovery of 
        personnel and equipment, refurbishment and follow-on 
        redeployment depending on mission requirements.

    The Marine Corps and Navy are committed to developing a seabasing 
capability that will provide a critical joint competency for assuring 
access and projecting power that will greatly improve the security of 
the United States. The marked increase in our warfighting capability 
will be apparent as we introduce new systems such as the MV-22 Osprey, 
the Expeditionary Fighting Vehicle, the Joint Strike Fighter, and the 
Lightweight 155mm Howitzer into our force structure, using them to 
enhance the already potent combat power of our Marine Air-Ground Task 
Forces as integral elements of our Nation's joint force.

    [Whereupon, at 3:37 p.m., the subcommittee adjourned.]


DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
                                  2005

                              ----------                              


                       WEDNESDAY, MARCH 10, 2004

                               U.S. Senate,
                          Subcommittee on Seapower,
                               Committee on Armed Services,
                                                    Washington, DC.

             THE POSTURE OF THE U.S. TRANSPORTATION COMMAND

    The subcommittee met, pursuant to notice, at 2:06 p.m. in 
room SR-232A, Russell Senate Office Building, Senator James M. 
Talent (chairman of the subcommittee) presiding.
    Committee members present: Senators Talent and Kennedy.
    Majority staff members present: Ambrose R. Hock, 
professional staff member; Gregory T. Kiley, professional staff 
member; and Thomas L. MacKenzie, professional staff member.
    Minority staff member present: Creighton Greene, 
professional staff member.
    Staff assistants present: Andrew W. Florell and Sara R. 
Mareno.
    Committee members' assistants present: Lindsey R. Neas, 
assistant to Senator Talent; and Mieke Y. Eoyang, assistant to 
Senator Kennedy.

     OPENING STATEMENT OF SENATOR JAMES M. TALENT, CHAIRMAN

    Senator Talent. Welcome, everybody. Today the Seapower 
Subcommittee meets to receive testimony from the top leadership 
of the United States Transportation Command (USTRANSCOM). I 
will go ahead and give my opening statement and, if Senator 
Kennedy, who I understand is on his way, has arrived, then we 
will defer to him for his opening statement, and, if not, then 
we will go ahead and begin with the witnesses' statements. Then 
when the Senator gets here he can give his opening statement or 
wait until his question period, whichever he would prefer.
    We are pleased to have General Handy with us, who commands 
USTRANSCOM and the Air Mobility Command. John, thank you for 
coming today. Also, Vice Admiral Brewer, who commands the 
Military Sealift Command--Admiral, thank you--and Major General 
Dunwoody, who commands the Surface Deployment and Distribution 
Command, formerly Military Traffic Management Command (MTMC). 
It is good to have you with us, General. It is hard for me to 
keep up with the names, so I keep reminding myself. Thank you 
for taking time out of your busy schedules to be with us today.
    The strategic lift of personnel and material is a crucial 
enabling ability that allows this country to project deterrent 
and, when required, striking force to execute the National 
Security Strategy. The United States Transportation Command is 
responsible for the strategic lift.
    Much has been accomplished in this country's ability to 
transport large quantities of material around the world since 
this was determined to be a limiting factor in the buildup for 
the first Gulf War in 1990-1991. Learning the lessons of this 
war, the United States has made significant investments, 
particularly in sealift and in the maritime prepositioned 
force, that greatly cut down on the time to quickly get the 
bulk of material to the most likely theaters of operation. It 
has been estimated that 95 percent of equipment in peacetime is 
moved on the sea.
    The Joint Chiefs of Staff delivered a report to Congress in 
2002 known as the Mobility Requirements Study for 2005 (MRS-
05). This study determined that the problems with sealift had 
largely been resolved, but that there was still a significant 
shortage of strategic airlift. With the approval of a multiyear 
procurement program for 60 additional C-17 aircraft, which will 
bring the inventory up to 180 aircraft, and a modernization 
program for the fleet of C-5 aircraft, much is being done to 
address this shortage.
    This study was done, however, using the two major theater 
of war National Military Strategy (NMS), which has changed. In 
its report last year, the Senate Armed Services Committee 
directed that a report be delivered that would verify the 
relevance of the numbers established by MRS-05 in light of more 
recent events, of which we are all aware.
    The committee has received this report and the report 
postulates that the MRS-05 moderate risk strategic airlift 
requirement of 54.5 million ton-miles per day (MTM/D) is 
understated. Specifically, the report estimates a more 
realistic moderate risk requirement for strategic airlift with 
the current National Military Strategy would likely fall in a 
range between 57.4 and 60 MTM/D.
    The report also highlights the need for an updated Mobility 
Capability Study (MCS) which would define requirements in light 
of the new NMS. The report concludes with the recommendation 
that to meet the increased demand the C-17 production needs to 
continue to a minimum of 222 aircraft and that an appropriate 
number of C-5s be modernized.
    Section 132 of the National Defense Authorization Act for 
Fiscal Year 2004 would prevent the Secretary of the Air Force 
from reducing the inventory of C-5 aircraft below 112 until an 
evaluation of a C-5A aircraft, which has incorporated the 
reliability enhancement and reengining program modification, 
has been operationally evaluated.
    In addressing the shortfall in strategic airlift, it is 
crucial to get the mix of C-17 and C-5 inventories with their 
unique capabilities correct.
    The subcommittee is also aware that the Secretary of 
Defense has designated the Commander of USTRANSCOM as the 
distribution process owner who will be the single point of 
contact for logistics and who must synchronize the entire 
supply chain from factory to foxhole. We are going to be very 
interested in how your command intends to implement this 
guidance and is in fact implementing this guidance.
    Again, we would like to welcome you here today and thank 
you for your service and the service of all the men and women, 
military and civilian, in your commands and the sacrifices of 
their families. We have received your written statements and 
they will be made a part of the record.
    Since Senator Kennedy has not yet arrived, I think we will 
go right to the statements of the witnesses. Again, I want to 
welcome all of you. Let's begin with General Handy.

    STATEMENT OF GEN. JOHN W. HANDY, USAF, COMMANDER, U.S. 
   TRANSPORTATION COMMAND; ACCOMPANIED BY MAJOR GEN. ANN E. 
 DUNWOODY, USA, COMMANDER, SURFACE DEPLOYMENT AND DISTRIBUTION 
    COMMAND; AND VICE ADM. DAVID L. BREWER, USN, COMMANDER, 
                    MILITARY SEALIFT COMMAND

    General Handy. Thank you, Senator Talent. I would first 
start out by saying how pleased all three of us are to be 
here----
    Senator Talent. This is a joint statement, I am sorry. Just 
go right ahead.
    General Handy. That is right, sir.
    I am certainly pleased to be here with my two component 
commanders and, of course, as you pointed out, I am the air 
component commander as well. We are thrilled to be here. We are 
very anxious to entertain your questions. As you pointed out, 
our statements have been submitted for the record and we would 
like to get right to the questions. So thank you for inviting 
us here, and we are ready.
    [The prepared statement of General Handy follows:]
             Prepared Statement by Gen. John W. Handy, USAF
   introducing the united states transportation command (ustranscom)
    As we enter a new year, our Nation remains globally engaged with 
terrorist entities whose stated aims continue to threaten the freedoms 
we, as Americans, all know and cherish. United States military forces 
remain deployed worldwide to combat this menace. Simultaneously, we are 
engaged in monumental nation-building efforts in southwest Asia, 
multiple peacekeeping operations in locations worldwide, and on guard 
against a continued threat on the Korean Peninsula. The heavy demands 
on American forces highlight the dangerous and unstable world 
environment existing today.
    As a combatant command uniquely structured to execute a global 
mission, USTRANSCOM provides air, land, and sea transportation for the 
Department of Defense (DOD), in peace and war. USTRANSCOM provides the 
synchronized transportation and sustainment which makes possible 
projecting and maintaining national power where needed, with the 
greatest speed and agility, the highest efficiency, and the most 
reliable level of trust and accuracy. To accomplish USTRANSCOM's day-
to-day joint mission, we rely upon our component commands: the Air 
Force's Air Mobility Command (AMC), the Navy's Military Sealift Command 
(MSC), and the Army's (Military) Surface Deployment and Distribution 
Command (SDDC) (formerly known as the Military Traffic Management 
Command). The component commands provide mobility forces and assets in 
a force structure supporting a seamless transition from peace to war. 
USTRANSCOM functions as an integrated team, focusing the total synergy 
of the entire Defense Transportation System (DTS), including both 
military and commercial transportation assets.
    USTRANSCOM's imperative is to provide consummate support to the 
warfighter. Simply put, we have three wartime mission objectives:

        1. Get the warfighter to the fight.
        2. Sustain the warfighter during the fight.
        3. Bring the warfighter home after the fight.

    Today's regional combatant commanders rely more heavily than ever 
on the strenuously tasked mobility forces as the number of missions and 
challenges facing them continues to increase. It is important to note 
that USTRANSCOM is only postured--from a force structure perspective--
as a one major war force. Regardless, USTRANSCOM supports not one, but 
all other combatant commanders simultaneously, placing a premium on our 
lift assets. Additionally, USTRANSCOM's ability to support multiple 
competing demands is constrained by access and force flow dynamics. Our 
limited transportation assets rely on an optimized force flow to meet 
demands. In a dynamic political-military environment, requirements can 
quickly exceed capabilities.
    USTRANSCOM's approach to posturing and improving itself to meet 
DOD's demanding distribution mission today and the increasing demands 
of tomorrow requires flexibility. Three themes guide our course:

         Theme One: Investing in the care and quality of 
        USTRANSCOM's most valuable resource--its people.
         Theme Two: Continued transformation of key processes 
        leveraged by information technology to provide seamless, end-
        to-end distribution management for defense.
         Theme Three: Maintaining readiness and modernization 
        to perform our global mobility mission.
                      ustranscom in 2003 and 2004
    The operational tempo (OPTEMPO) inherent in the build-up and 
execution of Operation Iraqi Freedom (OIF), the continued prosecution 
of Operation Enduring Freedom (OEF), and the ongoing support to 
Operation Noble Eagle (ONE) made 2003 a challenging and truly rewarding 
period in USTRANSCOM's history. The statistics are mind-boggling: 
between September 2001 and February 2004, USTRANSCOM moved 3,072,471 
short tons of cargo, 1.79 billion gallons of fuel, and 1,189,968 troops 
in support of OEF/OIF. Here is the big picture--in the largest and most 
demanding test of our total lift capability since Operation Desert 
Shield/Desert Storm, USTRANSCOM delivered the necessary combat power to 
Iraq faster and more efficiently than ever before. The men and women of 
USTRANSCOM, in concert with our Service partners and commercial 
teammates, have performed brilliantly.
    Our military's freedom to operate overseas is possible only through 
the continued defense of our homeland, and USTRANSCOM remains an 
integral part of that defense, as it has been since the terrorist 
attacks of 11 September 2001. AMC KC-135 and KC-10 air tanker aircraft, 
representing active duty, Air Force Reserve, and Air National Guard 
assets, have continuously supported Air Force combat aircraft 
patrolling the skies of the Continental United States (CONUS) in 
support of ONE and other routine duties.
    AMC tankers flew 1,704 missions refueling 3,684 receivers while 
supporting combat air patrols over our major cities and sporting 
events, continuing one of the highest air refueling operational tempos 
ever experienced within CONUS. Over 75 percent of these were Air Force 
Reserve and Air National Guard missions flown by volunteer ``citizen-
airmen.'' Additionally, while today's actual number is classified, I 
can tell you that the majority of the airlift on alert to respond to 
any United States Northern Command (USNORTHCOM) deployment order 
belongs to the Air National Guard and Air Force Reserve. Since the 
beginning of fiscal year 2003, USTRANSCOM aircraft have carried 1,618 
passengers and 461 short tons of cargo in the course of 29 airlift 
missions in support of ONE.
    While concurrently providing global support to all combatant 
commands, we focused considerable effort and assets toward ensuring the 
successful execution of OEF/OIF. OEF/OIF now ranks as the largest 
passenger airlift in history. Only the Berlin Airlift (1948-1949) 
exceeds it in terms of number of missions and tonnage flown, with OEF/
OIF airlift moving 882,609 short tons of cargo to date.
    Airlift played an integral part in expediting critical shipments 
and facilitating force maneuver. A spectacular example of this 
capability began on the night of 26 March 2003, when AMC C-17 aircraft 
successfully airdropped 1,000 paratroopers of the Army's 173rd Airborne 
Brigade into Northern Iraq to bolster anti-Saddam Kurdish forces after 
Turkey's refusal to permit the U.S. use of ports and forward bases. 
This was the largest air insertion since 1989's Operation Just Cause in 
Panama. Subsequent to the airdrop, C-17s executed a larger movement 
over five evenings, flying 62 missions from Italy into airfields in 
Northern Iraq. They deployed 2,000 additional troops, more than 400 
vehicles, and 3,000 short tons of supplies and equipment, solidifying 
coalition combat power on the northern front.
    AMC air tanker crews were instrumental in the initial success of 
OIF operations, completing 2,000 refueling missions through 1 May 2003 
in support of strategic airlift and inter-theater deployments. To date, 
AMC KC-135 and KC-10 crews had completed 4,768 refueling missions in 
support of United States Central Command (CENTCOM) operations. Tanker 
assets under the operational control of CENTCOM amassed over 9,000 
sorties with more than 40,000 receiver contacts, offloading over 475 
million pounds of fuel through the end of the fiscal year to sustain 
critical CENTCOM warfighting operations. Additionally, OEF support in 
the United States Pacific Command's (USPACOM) area of responsibility 
(AOR) accounted for an additional 163 air refueling missions.
    During the build-up for OIF, USTRANSCOM planners focused on 
maximizing the utilization of sealift whenever possible and avoided the 
reliance on airlift that characterized the initial phase of OEF in 
2001. The total sealift tonnage greatly surpassed the tonnage airlifted 
to Southwest Asia in support of OIF. With the cooperation of CENTCOM 
leadership, USTRANSCOM achieved a more effective balance between 
airlift and sealift in guiding mobility operations. This collaboration, 
combined with the skills of SDDC port managers and MSC vessel 
operators, resulted in the deployment of 910,000 short tons on 155 
voyages between December 2002 and 1 May 2003. From 1 May 2003 to date, 
an additional 68 voyages brought over 433,000 short tons to Iraq and 
the surrounding area for a grand total of over 1.3 million short tons 
delivered via sealift. Some 76 voyages redeployed more than 556,000 
short tons during that same period. By striving to leverage sealift 
first in deployment operations, CENTCOM and USTRANSCOM took advantage 
of a sealift fleet greatly expanded and modernized since 1991.
    In striking contrast to past practice, we successfully implemented 
a ``force packaging'' strategy during OIF that synchronized the 
movement of combat-ready modules of unit equipment (``force 
packages''). This strategy allowed units like the Army's 101st Airborne 
Division to quickly and coherently assemble upon debarkation overseas. 
SDDC loaded the entire division, nearly 4,000 vehicles and 250 
helicopters, on only 5 vessels that offloaded overseas in just a 12-day 
period, adding striking power to the combatant commander's arsenal in a 
fraction of the time required during Operation Desert Shield/Desert 
Storm. It ensured the integrity and rapid availability of a combat-
effective fighting force far faster than the prior piecemeal movement 
of unit equipment.
    USTRANSCOM relies on its commercial transportation industry 
partners and associated labor organizations to provide significant 
transportation capability during contingencies. OEF and OIF are no 
exception. Participation by commercial passenger airline and maritime 
companies gave AMC, MSC, and SDDC a vital extra edge in moving forces 
and equipment to support operations in Iraq. Chartered aircraft moved 
78 percent of deploying troops during the build-up and 85 percent of 
deploying troops during the major combat operations. On 8 February 
2003, 51 passenger aircraft from 11 commercial companies activated 
under Stage I of the Civil Reserve Air Fleet (CRAF). CRAF aircraft 
deployed 254,000 troops on 1,625 missions through 18 June 2003 when the 
aircraft were deactivated. Similarly, the number of ships under MSC's 
operational control supporting sealift operations jumped from a 
``normal'' of approximately 22 ships to a peak of 127, including 40 
government-owned ships from the Maritime Administration's (MARADs) 
Ready Reserve Force (RRF). This transition from a peacetime environment 
to a contingency footing enabled USTRANSCOM to deploy the military 
equipment and supplies needed to support OEF/OIF operations. In fact of 
the total 1,189,968 passengers moved during OEF/OIF, 75 percent were 
moved by commercial means, and 25 percent by organic airlift.
    The large medium speed roll-on/roll-off (LMSR) vessel emerged as 
USTRANSCOM's strategic sealift success story. Procured based upon the 
lessons of Operation Desert Shield/Desert Storm, 18 LMSRs completed 38 
total voyages during initial OIF deployment operations, lifting more 
than 5.3 million square feet of cargo. This was approximately 26 
percent of the total requirement. By comparison, one LMSR in OIF 
carried the equivalent of six commercial charter ships during Operation 
Desert Shield/Desert Storm. From another perspective, it requires 300 
C-17s to deliver the amount of cargo carried by one LMSR. Of the 3.1 
million short tons moved during OIF/OEF, 74 percent was moved by 
surface, 26 percent by air (past 6 months, 85 percent moved by surface, 
15 percent by air). Of that 74 percent moved by surface, 37 percent was 
moved by commercial charter and liner service.
    The intensive combat operations experienced during OIF 
significantly increased the patient movement OPTEMPO in the CENTCOM 
AOR. USTRANSCOM's Joint Patient Movement Requirements Center (JPMRC) 
originally deployed to the theater supporting OEF. There they performed 
as a patient movement management cell coordinating the movement, 
aeromedical and otherwise, of sick and wounded personnel from the AOR 
to higher levels of care in Europe and the United States. The JPMRC 
maintained 100 percent in-transit visibility (ITV) of patients entering 
the patient movement system via the USTRANSCOM Regulating and Command 
and Control Evacuation System (TRAC2ES). Coupled with the ability to 
utilize aircraft within the theater of operations or in-system to 
quickly respond to casualty movement requirements, aeromedical 
evacuation (AE) forces have successfully moved over 17,000 patients 
from the CENTCOM area of operations to date. The JPMRC ensured the most 
seriously ill or injured individuals quickly reached higher-level 
medical care. More than 9,800 of those movements occurred between 19 
March and 30 September 2003, with a total of 1,993 patient movements 
during the 42 days of major OIF combat operations, 19 March through 1 
May 2003. Not a single patient died while in the capable hands of 
USTRANSCOM's AE professionals during that period.
    Additionally, TRAC2ES has become the centerpiece of homeland 
defense patient movement planning. With "lift-bed planning" capability, 
TRAC2ES is key to managing large numbers of casualties that might occur 
during natural disasters or terrorist attacks. Further development is 
planned to integrate TRAC2ES fully within the National Disaster Medical 
System.
    USTRANSCOM continued its contributions to the OEF-related detention 
of large numbers of al Qaeda, Taliban, and other detainees at 
Guantanamo Bay, Cuba detention facility in support of the United States 
Southern Command (USSOUTHCOM). USTRANSCOM airlift missions sustained 
detention operations through the movement of over 7,000 passengers 
(U.S. military personnel as well as over 100 detainees) and 133 short 
tons of supplies throughout the fiscal year. Detainee missions required 
intense security methods and the support of 45 air refueling missions 
to move to and from Guantanamo Bay. In a twist from the previous year, 
these missions included the repatriation of detainees released from the 
facility once it was determined they no longer posed a threat to U.S. 
interests. With the significant numbers of detainees remaining at 
Guantanamo Bay, we continue to transport necessary supplies and 
equipment via barge from Jacksonville, Florida, averaging 440 short 
tons per week.
    Despite the extraordinary focus required to conduct support 
operations for ONE/OEF/OIF and other contingencies, USTRANSCOM 
continued to support the rotation of U.S. forces participating in other 
contingency and peacekeeping operations around the globe. Prior to the 
completion of Operations Northern and Southern Watch at the initiation 
of OIF combat operations, USTRANSCOM delivered over 13,400 passengers 
and 3,300 short tons of cargo via airlift to locations in Turkey and 
Kuwait. In Kosovo (KFOR) and Bosnia (SFOR), a combination of commercial 
and organic airlift transported more than 18,000 passengers and 1,080 
short tons of cargo to and from the area. Meanwhile, surface and 
sealift components loaded and transported another 5,040 short tons in 
support of these long-standing operations. Additionally, from July to 
September 2003, USTRANSCOM airlift elements delivered 764 passengers 
and 798 short tons of cargo to Senegal in support of Liberian 
peacekeeping operations.
    USTRANSCOM continued support to over 130 combatant command and 
Joint Staff-sponsored exercises during fiscal year 2003. These are some 
of the more notable ones. From February through April of 2003, 
USTRANSCOM supported the Reception, Staging, Onward Movement, and 
Integration (RSOI) exercise in the Republic of Korea via the airlift of 
5,805 passengers and 597 short tons of cargo, and the sealift of an 
additional 715 short tons. From February through July of 2003, 
USTRANSCOM supported Exercise Cobra Gold in Thailand through the 
airlift of 11,166 passengers and 784 short tons of cargo, and the 
sealift of 21,142 short tons of supplies and equipment. From June 
through September 2003, USTRANSCOM assets once again supported 
deterrence on the Korean Peninsula, this time delivering 6,922 
passengers and 615 short tons of cargo via airlift, and an additional 
3,614 short tons of equipment via sealift for Exercise Ulchi-Focus Lens 
(UFL).
    The command also actively participated in the planning and 
execution of several other key exercises instrumental to improving 
DOD's ability to deploy and sustain forces. Exercise Turbo Intermodal 
Surge (TIS) exercised deployment of unit equipment from home station to 
deployed locations using commercial intermodal container systems and 
container ships. Exercise Turbo Containerized Ammunition Distribution 
System (CADS) exercised the movement of containerized munitions from 
CONUS depots to installations overseas using commercial and DOD 
intermodal systems. Finally, Exercise Joint Logistics Over-the-Shore 
(JLOTS) demonstrated the capability to offload/onload vessels off-shore 
for deployment/sustainment operations in a port-restricted environment. 
JLOTS techniques and equipment utilized in Kuwait in support of OIF 
were key to the successful deployment of munitions and sustainment 
cargo, providing a ready solution to the restricted port environment 
encountered there.
    Not all operations were contingency or exercise-focused. AMC 
aircraft flying in support of Operation Deep Freeze, the ongoing 
National Science Foundation (NSF) research program in Antarctica, 
delivered a total of 7,802 passengers and 2,310 short tons of cargo. 
Four MSC-chartered vessels delivered an additional 12,745 short tons of 
dry cargo and 14 million gallons of fuel for the NSF community. As a 
side note, USTRANSCOM fully supports the United States Coast Guard's 
(USCG's) efforts to enhance its ability to maintain the sea ice channel 
to McMurdo Station through reliability improvement and service life 
extension projects for its aging Polar Class icebreaker fleet. These 
two vessels, the United States Coast Guard Cutter (USCGC) Polar Star 
and USCGC Polar Sea, are critical to keeping the vital sea lines of 
communication for sustainment open to Antarctica.
    Humanitarian relief operations on Guam after Super Typhoon Pongsona 
in December 2002 required a mixture of 24 military and commercial 
airlift missions to deliver 108 passengers and 1,165 short tons of 
humanitarian relief supplies. In February 2003, USTRANSCOM supported 
recovery efforts after the tragic Space Shuttle Columbia mishap via six 
total airlift missions. Finally, in October 2003, AMC C-130s configured 
with the Modular Airborne Fire Fighting System performed 60 drops (over 
16,000 gallons of retardant) to help extinguish the California forest 
fires, preventing further loss of lives and property in the region.
    USTRANSCOM also continued high priority and time sensitive airlift 
support for the President of the United States. AMC aircraft completed 
a total of 234 airlift missions in support of the President, flying the 
Commander in Chief to Mexico, the Azores, Northern Ireland, Europe, 
Southwest Asia, Africa, the Western Pacific, the United Kingdom, and 
Iraq.
                  people: ustranscom's greatest asset
    To meet America's transportation challenges, USTRANSCOM must first 
continue to develop and retain a talented and motivated mobility team. 
USTRANSCOM's strength, readiness, and warfighting capability depends 
upon these exceptional people and their extraordinary efforts to 
execute USTRANSCOM's global mission every day. Throughout DOD, we must 
remain sensitive to pay and quality of life issues and their associated 
effects on our service members. Meeting the needs of our people leads 
to increased readiness and higher retention and is absolutely the right 
thing to do.
    In addition to compensation considerations, OPTEMPO, personnel 
tempo, and increased home station workload are other factors that 
negatively impact our retention efforts. Our personnel spend a great 
deal of time away from home. Those not deployed must work harder to 
compensate for deployed personnel and training time lost to previous 
deployments. Our peacetime workload is often as heavy for active duty 
personnel as wartime, and is even more arduous for our guardsmen and 
reservists. They must balance high OPTEMPO demands with the stresses of 
civilian careers. USTRANSCOM and our components have taken steps, such 
as using Army National Guard security forces to augment base security, 
to mitigate the effects of the unprecedented peacetime OPTEMPO. We are 
taking additional measures, such as increasing support manning and 
aircrew-to-aircraft ratios to the new levels required. Nevertheless, 
many members are leaving for more stable and predictable civilian 
careers. Now is the time to correct the people-to-mission mismatch.
    Another USTRANSCOM area of concern is the availability of a 
sufficient number of qualified civilian mariners willing and available 
to fulfill the additional requirements created by the activation and 
long-term operation of MSC and MARAD surge sealift vessels. Volunteer 
commercial mariners crew the surge vessels. The decline in U.S. flagged 
fleet size, increased training requirements, and more attractive shore-
side employment have led to a decrease in the number of fully qualified 
mariners. Fortunately, mariner availability was sufficient to 
consistently ensure on-time vessel activation of the 50-plus ships 
supporting OEF/OIF, to include Fast Sealift Ships (FSS), LMSRs, a 
hospital ship, and numerous MARAD RRF ships. Since the entire surge 
fleet was not activated and because no wholesale crew rotations were 
required for OEF/OIF, there remains uncertainty regarding the ability 
of the maritime industry and maritime labor unions to produce an 
adequate number of fully trained and qualified mariners to fulfill the 
additional requirements created by the full activation of all MSC and 
MARAD surge vessels for a prolonged period. However, in the future, 
there are no guarantees that sufficient mariners will be available when 
needed.
    USTRANSCOM, MSC, SDDC, and MARAD support the maintenance of a 
viable U.S. mariner pool through enforcement of cargo preference 
requirements, support for the Maritime Security Program (MSP), and 
vigorous maritime training and education. MSC has initiated a 
collaborative effort with USTRANSCOM and MARAD, in concert with the 
maritime industry, to revalidate and compare the peacetime/wartime 
requirements of mariner qualifications and availability in order to 
specifically identify potential shortfalls. Initial comparison of 
requirements against qualified mariners indicated potential shortfalls 
of certain unlicensed mariners during a worst-case scenario if all 
surge assets are activated for the long term (i.e., greater than 6 
months), requiring a full rotation of all crew billets. Further, 
MARAD's 2002 Mariner Survey regarding mariner ``willingness and 
availability'' to sail when requested also predicts potential 
shortfalls in both licensed and unlicensed mariners during a worst-case 
scenario. As a result, we continue to urge the administration and 
Congress to support programs to promote the expansion of the U.S. 
merchant mariner pool.
    Support for our people is required in other areas as well. The 
increase in the Basic Allowance for Housing (BAH) in the past few 
years, brought about through DOD's Housing Requirements and Market 
Analysis Program and BAH Initiative, has had an extremely positive 
impact on the quality of life of our military members and their 
families. With these recent BAH increases, more service members are 
finding it easier to locate affordable housing within their local 
areas. Continued congressional support to ensure out-of-pocket expenses 
are eliminated will help more service members locate affordable and 
suitable housing within their communities.
    The movement of service members' personal property in conjunction 
with their reassignment is a major quality of life issue. SDDC is 
currently developing the Families First Program, a comprehensive plan 
to significantly revamp DOD household goods movements beginning in 
October 2005. A significant change for service members under Families 
First is their empowerment to determine which quality carrier will 
accomplish their particular move. SDDC's method of distributing 
household goods traffic to carriers will be based 70 percent on 
customer satisfaction and 30 percent on cost, rightly placing the needs 
of the service member first. Another advantage under the program is the 
inclusion of full replacement value (FRV) for loss or damage to 
personal property transported at Government expense, a significant 
quality of life enhancement. Section 634 of the fiscal year 2004 
Defense Authorization Act provides DOD with the authority to contract 
with industry for FRV. Currently, agencies do not pay their employees 
or military members for loss and damage beyond a depreciated amount 
established by claims service regulations. As a result, personnel who 
are frequently required to relocate their families suffer from 
aggregate effects of uncompensated losses to their families' 
possessions during the period of their government or military service. 
SDDC will continue partnering with industry and the Services to ensure 
further progress on this significant issue.
    Recent command headquarters restructuring efforts, both at 
USTRANSCOM and within our component commands, have led to numerous 
personnel placement actions and other transition requirements. Mindful 
of the turmoil such events can have on individuals' lives, both 
military and civilian, USTRANSCOM is working to ensure all affected 
employees receive the level of transition assistance, training, and 
placement options they require to continue their government careers 
successfully or transition to the private sector. We must be 
particularly mindful of the value of our civilian employees. 
Increasingly, we rely on civilian employees to make informed decisions 
and take decisive actions in regard to evolving missions in the war on 
terror (WOT). Motivated and talented people are key to our success, and 
thus we must attract and retain the best civilian personnel, whether 
they ultimately remain within the USTRANSCOM family, or contribute 
elsewhere within the government at large.
    Together, Congress and DOD have made great strides in our people 
programs. This year's legislation must continue to reaffirm a 
commitment to take care of our civilian employees, service members, and 
their families as they, in like manner, commit to a career of service 
to our country. As leaders, we must remain mindful of how important it 
is that we win the battle for the hearts and minds of these talented 
men and women and their families.
                 transformation and process improvement
Information Technology: Our Key Enabler
    USTRANSCOM is an information-intensive command. Despite technology 
advances, planes, trucks, trains, and ships only move so fast. 
Similarly, geographic hurdles remain relatively fixed for our physical 
assets. Hence, Information Technology (IT) is the enabler for 
collaborative, dynamic decisionmaking and global command and control to 
deliver the speed, effectiveness, and efficiency of USTRANSCOM's 
operations; and, it is not IT alone, but the combination of IT with 
supportive processes and organizational facilitators, that gives us a 
real advantage.
    USTRANSCOM is committed to information dominance. Actionable, 
decision-quality information superhighways are the way ahead. Already, 
the command uses its IT to direct execution, track delivery, pay 
providers, and make the most effective use of transportation assets, 
while routinely operating in austere environments half a world away. 
Simply put, USTRANSCOM cannot execute its mission without robust IT.
    One of USTRANSCOM's key responsibilities to the warfighter is to 
ensure ITV of personnel, supplies, and equipment. USTRANSCOM uses the 
Global Transportation Network (GTN) as the IT tool to provide ITV. GTN 
provides the near-real time worldwide visibility of passengers and 
material moving from origin to destination through the DTS, regardless 
of the mode of transportation used. GTN uses information provided by 23 
DOD source systems and more than 125 commercial carrier IT systems. 
During OEF and OIF, the command extended that capability in support of 
two major combat operations to include movement of passengers and cargo 
within both theaters of operations. At the peak of OIF, GTN processed 
over 5 million transactions per day, with over 14,000 daily customer 
requests for information on strategic and tactical lift. Development of 
the next generation of GTN, called GTN 21, is well underway towards an 
early fiscal year 2005 initial operating capability. GTN 21 will 
integrate transportation information that supports our command and 
control mission requirement to direct, control, and execute operations 
of assigned forces pursuant to global transportation management.
    We will advance the current USTRANSCOM collaborative capability 
through Agile Transportation for the 21st Century (AT21) initiatives 
designed to introduce collaborative analysis and decisionmaking 
capabilities in distributed, information-intensive environments. Those 
environments will enable interactive visualizations to exchange 
information; evaluate courses of action; and make more informed, 
effective, and timely modal decisions.
    In addition to implementing major improvements to our 
transportation and command and control (C2) data systems, USTRANSCOM 
recognizes and maintains a significant reliance on global 
communications networks. Indeed, our success in developing world-class 
information technology systems creates a need for more robust bandwidth 
resources and end-to-end connectivity with transportation elements and 
supported forces deployed throughout the world. Accordingly, USTRANSCOM 
and its component commands continue to invest in major upgrades to 
servicing communications and network infrastructures. These 
modernization and transformation efforts address a range of fixed 
terrestrial and space-based networks to include the ``last tactical 
mile.'' We continue to implement radio-frequency automatic 
identification technologies to support our goal of providing combatant 
commanders detailed tracking information on the movement of cargo 
throughout the transportation system. Further, we are making major 
strides in expanding the bandwidth capabilities of our terrestrial 
campus networks and achieving a level of redundancy to ensure full 
continuity of operations.
    On the contingency operations side, the command is also making 
significant progress in addressing ``last tactical mile'' requirements 
using innovative deployable satellite communications techniques and 
systems. Our progress is clearly demonstrated as we enjoy unprecedented 
success rates in capturing and disseminating cargo and passenger 
movement information from our unimproved tactical air and seaports 
supporting OEF and OIF. However, these successes do not come without 
challenges and costs. Towards that end, USTRANSCOM fully supports 
ongoing DOD programmatic efforts to expand terrestrial Global 
Information Grid enterprise bandwidth and launch robust communications 
and blue-force asset tracking satellite constellations.
    In accordance with current mandates, USTRANSCOM developed and 
implemented an enforceable enterprise-level architecture (EA) for the 
DTS. The DTS EA is the principal tool for managing the command's 
current operational processes, capabilities, and technology investments 
as well as the required operational and technological initiatives for 
the future. The latter is especially important as USTRANSCOM works hard 
to move the DTS forward as the premier global distribution organization 
in the world. We have had tremendous success, garnering several 
prestigious IT awards in 2003 to include the Computerworld Honors 
Program Laureates Medal for Outstanding Achievement in IT by a 
Government Organization, E-Gov Digest/Federal Computer Week magazine's 
Enterprise Architecture Excellence Award, and a nomination for the DOD 
Chief Information Officer (CIO) Award. It is no longer solely a matter 
of who has the best or most people and equipment, but rather who can 
best gather, understand, and manage information. Because National 
interests rely so heavily on force projection, timely and free-flowing 
transportation information is vital. Thus, it is important that 
USTRANSCOM continuously evolve and manage an integrated, forward-
looking, interoperable information systems capability for the entire 
DTS and those who depend upon or interact within it.
Distribution Process Owner (DPO)
    On September 16, 2003, the Secretary of Defense designated 
Commander, USTRANSCOM, as DOD's Distribution Process Owner, charged 
with improving the overall efficiency and interoperability of 
distribution-related activities: deployment, sustainment, and 
redeployment support during peace and war. In addition, the DPO serves 
as the single entity to direct and supervise execution of the strategic 
distribution system.
    Prior to this designation, end-to-end distribution support to the 
warfighter was marked by a multitude of process and information 
technology challenges. Essentially, DOD distribution was a series of 
stove-piped processes and information systems managed by many discrete 
owners. Such segmentation caused inefficiencies and drove DPO 
designation to promote enterprise solutions.
    As a Department, we will bring our collective talents and ongoing 
initiatives together to forecast requirements, synchronize the movement 
of cargo and personnel from a source of supply to a designated 
customer, and expeditiously respond to warfighter requirements. The 
intention is to provide a ``factory to foxhole'' distribution system, 
linking the entire global DOD supply chain.
    The DPO's focus area extends from a point of sale to the first 
retail activity in theater, as designated by the theater commander. In 
addition, we plan to designate one IT backbone, establishing business 
rules to link sustainment and distribution systems into a data 
warehouse, where supply requisitions and movement requirements are 
visible to distribution system customers.
    In conjunction with our partners, we have already started the 
process of transforming the distribution system. We have solicited the 
ideas and active support of OSD, the Joint Staff, Combatant Commanders, 
Services, and DLA in determining the road ahead. With those partners, 
we have collaboratively determined the key issues, identified 
appropriate lead, and have begun work through a series of joint service 
teams to drive distribution process improvements.
    For instance, we are effectively shattering the barrier between 
strategic and theater distribution as one of our first ``quick wins.'' 
We deployed a first-ever CENTCOM Deployment and Distribution Operations 
Center (C-DDOC) to the CENTCOM AOR within 90 days of determining there 
was a need. We will use the lessons learned from this pilot to form the 
basis for an enterprise approach to manage strategic and theater 
distribution requirements and assets.
    To drive consistent change, we have established a supporting 
organizational structure to transform DOD distribution. The 
Distribution Transformation Task Force, as the name implies, crosses 
Service, combatant command, and agency borders, and extends from flag 
officer to action officer level. Ultimately, this organization will 
develop process and technology solutions that will transform DOD's end-
to-end distribution system.
    We have a unique opportunity to use the capabilities and peer 
influence that a combatant commander brings to the table to transform 
our strategic distribution system into a single-faced, reliable, 
visible, and simplified strategic distribution system. The warfighters 
deserve no less.
Organizational Change
    In 2003, USTRANSCOM optimized its headquarters organization to 
better serve its customers while conserving precious time and 
resources. Originally initiated as part of a DOD-mandated 15 percent 
headquarters reduction effort, the command made the most of the 
opportunity through prudent elimination of redundancy, divesting of 
functions better accomplished elsewhere, and realigning functionally 
within the headquarters along core business processes. USTRANSCOM 
created a light, lean, execution-focused Operations Directorate (J3) by 
redistributing non-execution related functions, processes, and 
personnel to other command directorates and centers of gravity. This 
reshaped organization allows us to better support the ongoing WOT while 
posturing ourselves to accept transformational responsibilities. The 
restructured J3 includes a Surface Cell leveraging subject matter 
experts from SDDC, MSC, and USTRANSCOM in order to improve the 
timeliness and effectiveness of surface modal decisions made by the 
command. Our exceptional responsiveness in the recent build-up to and 
prosecution of OIF is solid testimony to the success of our 
reorganization efforts.
    Over the past several years, USTRANSCOM's components have actively 
transformed their own structures as well. SDDC's recent name change 
reflects its new emphasis on joint distribution. The SDDC Operations 
Center, with its enhanced ability to focus on directing terminal 
operations at its 24 military ports around the globe, has made end-to-
end distributions a priority, thus supporting USTRANSCOM's overarching 
task of improving the DOD distribution system.
    Reorganization within AMC in 2003 returned the command to its 
historical roots of executing global mobility operations and eliminated 
functions redundant to the AMC staff. Highlighting the importance of 
forward operations, AMC's two numbered air forces were redesignated as 
Expeditionary Mobility Task Forces, providing direct, forward 
leadership of critical mobility assets. Simultaneously, AMC reactivated 
the 18th Air Force at Scott AFB to create a single commander charged 
with the tasking and execution of all air mobility missions. The 18th 
Air Force Commander maintains operational control of AMC's Tanker 
Airlift Control Center and all AMC airlift wings and groups within 
CONUS, Europe, and the Pacific, freeing the AMC Headquarters staff to 
focus on training, organizing, and equipping the air mobility force. 
Similar to the USTRANSCOM and SDDC changes, AMC's restructuring 
optimizes the organization to support worldwide deployment and 
distribution operations.
Financial Transformation
    USTRANSCOM, in partnership with the Air Force and Defense Finance 
and Accounting Service, is committed to transforming its business and 
financial processes and systems enabling improved support to the 
warfighter. As a part of DOD's Business Management Modernization 
Program, USTRANSCOM submitted and the Under Secretary of Defense 
(Comptroller) approved an initiative to improve outdated and unreliable 
processes and systems for working capital and general fund financial 
transactions. The objective is to provide a single financial system for 
USTRANSCOM that is integrated, reliable, accurate, and timely. In 
addition, Air Force general funds processes will be reengineered 
allowing USTRANSCOM and AMC to effectively manage general and working 
capital funds within the same system, further reducing redundancy and 
promoting efficiency within the financial management system.
    readiness and modernization: building for the present and future
Readiness: One Team--One Fight
    USTRANSCOM readiness relies heavily on our mobility team partners 
in the National Guard and Reserve. More than any other combatant 
command, USTRANSCOM relies on its Reserve components (RCs) for 
peacetime responsiveness and wartime capability. In every operational 
arena--air, land, and sea--USTRANSCOM RCs provide most of the Command's 
military wartime capability. Since USTRANSCOM cannot meet requirements 
without RC support, it is imperative that the Command and its 
components maintain RC mobilization ability and flexibility.
    The Guard and Reserve provide approximately 56 percent of 
USTRANSCOM's personnel. They also comprise 61 percent of CONUS land and 
57 percent of airlift transportation capacity. In fact, the Air Reserve 
Component (ARC) owns 53 percent of outsize/oversize airlift capability 
(C-5s, C-141s, and C-17s), more than 62 percent of the KC-135 force, 
and over 77 percent of the C-130 fleet.
    RC support has been key to USTRANSCOM's peacetime responsiveness 
and the Command's ability to meet its mission in the WOT. The 
President's Executive Order authorizing partial mobilization (up to one 
million reservists for up to 2 years) has proven crucial during OEF, 
ONE, and OIF. Although thousands of our Guard and Reserve Forces 
volunteered to support these contingencies, USTRANSCOM and its 
components were required to mobilize thousands more, most of whom 
deployed in support of air refueling, airlift, and force protection 
missions.
    To put this in perspective, in a typical year, AMC utilizes the 
services of approximately 1,400 ARC volunteers over the course of 
approximately 450,000 man-days to conduct normal operations. In fiscal 
year 2003, AMC mobilized 27,532 ARC personnel to support contingency 
operations, providing a total of 1,158,034 man-days over and above its 
contingency volunteers. The importance of RC personnel is just as 
pronounced in MSC and SDDC. MSC mobilized 111 RC personnel, a total of 
16,498 man-days, in support of sealift operations in fiscal year 2003. 
SDDC relies on its Reserve Forces for approximately 26,500 man-days in 
a normal year, but used 326,310 man-days for 894 mobilized personnel 
throughout fiscal year 2003 in response to contingencies. Even 
USTRANSCOM Headquarters, in the midst of unprecedented OPTEMPO, 
benefited from expertise provided by 144 reservists and guardsmen, 
contributing 40,725 man-days of experience in the effort.
Antiterrorism and Force Protection (AT/FP) Readiness
    USTRANSCOM aggressively advanced DOD's efforts in combating 
terrorism and supporting homeland security. The command and its 
components implemented key programs and collaborated on interagency 
initiatives contributing to success in the WOT.
    USTRANSCOM led the first-ever development of embarked security 
teams on MSC common-user sealift vessels deploying in support of OIF 
titled Operation Guardian Mariner (OGM). Supported heavily by Army and 
Marine Corps forces and expertise, OGM ultimately mobilized 110 twelve-
man teams plus a command and control element to secure vessels 
transiting chokepoints and ports within the CENTCOM AOR deemed at risk 
for terrorist activities. USTRANSCOM subsequently expanded the scope of 
OGM to provide security to common-user MSC ships globally. Recognizing 
the success of OGM, the Secretary of Defense acted to further 
institutionalize and perpetuate the program by designating the Navy as 
Executive Agent for military sealift force protection beginning in June 
2004, and USTRANSCOM is currently coordinating program transition 
details with that service.
    Man Portable Air Defense Systems (MANPADS), or shoulder-fired 
surface-to-air missiles, remain the most serious threat to our air 
mobility aircraft. In cooperation with the National Geospatial-
Intelligence Agency, we have developed computer-generated MANPADS 
footprint graphics that display risks to airlift as they cycle through 
airfields in high-risk locations. USTRANSCOM and AMC also have 
partnered with outside agencies to mature and expand cargo-screening 
technologies and develop powerful new tools that will ultimately detect 
small amounts of explosives in packed cargo pallets without the use of 
labor-intensive individual inspections.
    Homeland seaport security continues to be one of the Nation's most 
challenging force protection issues. In order to strengthen security 
within our seaports and ensure our ability to deploy and sustain 
forces, we have engaged on several fronts with MARAD and other National 
Port Readiness Network (NPRN) partners. The result is an NPRN 
Memorandum of Understanding which lays out specific procedures for 
USTRANSCOM, MSC, SDDC, and U.S. Coast Guard (USCG) in coordinating and 
executing port and waterside protection of strategic sealift out-load 
operations. The addition this past year of USNORTHCOM and the 
Transportation Security Agency to the NPRN lends significant expertise 
in this critical area. Additionally, our bilateral work with the USCG 
was, in part, the impetus for their creation of new and extremely 
valuable Mobile Safety and Security Teams (MSST) that provide increased 
capability to protect the Nation's strategic ports from seaward 
threats. Furthermore, these teams provide waterside security for MSC 
vessels.
    USTRANSCOM has launched information and intelligence-sharing 
initiatives with all four commercial transportation sectors, air, road, 
rail, and sealift, as well as with the Transportation Security 
Administration, to leverage the unique capabilities within both the 
commercial and defense sectors of the DTS and to collectively close 
seams within the transportation system's security posture nationwide. 
Antiterrorism legislation is a step in the right direction, but 
coordination of the many users of our commercial ports is an enormous 
undertaking.
    Concerning our military ports, USTRANSCOM and SDDC worked to secure 
emergency funding to further improve security at Military Ocean 
Terminal Sunny Point (MOTSU), North Carolina and Military Ocean 
Terminal Concord (MOTCO), California. These funds will build innovative 
waterside protective barriers to help prevent a seaborne terrorist 
attack against these valuable facilities. Contracts were awarded in 
August 2003, and construction began in November 2003 for these 
important security enhancements.
    The Command's Critical Infrastructure Protection (CIP) program made 
excellent progress during the past year. USTRANSCOM conducted 
vulnerability assessments of 19 identified critical nodes in fiscal 
year 2003, partially paid for through WOT funding. With continued 
funding, now managed by the CIP Director in the Office of the Assistant 
Secretary of Defense for Homeland Security, we can continue this vital 
work throughout fiscal year 2004.
    The potential threat of Chemical, Biological, Radiological, 
Nuclear, and High Yield Explosive (CBRNE) attack at home and abroad 
further exacerbates USTRANSCOM's mission planning and execution. 
USTRANSCOM is diligently working to enhance its capability to protect 
personnel and facilities from CBRNE attack and, should such an attack 
occur, to detect contamination and decontaminate facilities, equipment, 
and personnel in order to facilitate mission success. AMC recently 
participated in a Large Frame Aircraft Decontamination Demonstration at 
Eglin AFB, Florida, the results of which are due for release later this 
year. SDDC and MSC coordinated the procurement, distribution, and 
training of the necessary CBRNE equipment to protect merchant mariners 
on both government-owned and commercial cargo vessels transiting ports 
within the CENTCOM AOR during OIF major combat operations. Both 
organizations continue to train and exercise CBRNE protection and 
response at port facilities via their units stationed worldwide. With 
the global proliferation of such weapons, CBRNE defense planning will 
continue to require our attention and requisite funding for the 
foreseeable future.
Mobility Capability Study (MCS)
    Our current transportation force structure was programmed to meet 
the requirements established by the Mobility Requirements Study 2005 
(MRS-05), based on the 1997 National Military Strategy (NMS). This 
study was completed in 2000. As a result of the events of September 11, 
the national military objectives have changed. Objectives delineated in 
the draft NMS increase our overall air refueling, airlift, and sealift 
requirements considerably. A proposed plan is for the MCS and OA-05 to 
begin in June 2004, after the completion of OA-04, and conclude not 
later than March 2005. The goal to complete this full end-to-end 
mobility analysis within 10 months presents an ambitious challenge. The 
scenarios proposed to support the MCS are centered in different regions 
of the world that will highlight our global mission. Both the ``win 
decisively'' and ``swiftly defeat'' scenarios will be developed in the 
multi-service force deployment process and vetted in the OA process.
Readiness and Modernization Air Mobility
    USTRANSCOM's number one shortfall is its aging and numerically 
inadequate strategic airlift fleet. We have a significant gap in our 
ability to meet the needs of DOD agencies, specifically the needs of 
the regional combatant commanders. Our current strategic airlift 
shortfall of 9.8 million ton-miles per day (MTM/D) from the MRS-05 goal 
of 54.5 MTM/D is due to a shortage in the number of aircraft available 
and significant maintenance challenges specifically associated with our 
fleet of C-5 aircraft. Consequently, a key USTRANSCOM modernization 
goal is to retire the oldest and poorest performing C-5s, modernize the 
remainder, and evaluate the continued procurement of C-17s.
    The C-5 continues to be a critical component of AMC's airlift fleet 
and is integral to meeting airlift mandates. However, the aircraft's 
enormous capacity is hampered by unacceptably low reliability and 
maintainability. Current Mission Capable (MC) rates for C-5A and C-5B 
aircraft are 63.5 percent and 73.8 percent, respectively. In fact, 
during the last 4 years, because of low C-5 MC rates, AMC has had to 
assign two C-5s against many higher-priority missions to better ensure 
reliability and/or on-time mission accomplishment. The net result is 
fewer aircraft available for tasking and less operational flexibility.
    AMC is addressing this critical capability shortfall with two major 
C-5 modernization efforts: the Avionics Modernization Program (AMP), 
and the Reliability Enhancement and Re-engining Program (RERP). AMP 
replaces all high-failure and unsupportable avionics and flight 
instrument systems on the C-5 fleet. This replacement makes the C-5 
compatible with international standards required for flight today, as 
well as in tomorrow's increasingly restrictive Global Air Traffic 
Management (GATM) airspace. AMP installs an all-weather flight control 
system and Secretary of Defense mandated navigational safety equipment, 
including a Terrain Avoidance Warning System (TAWS). RERP will replace 
engines and pylons and upgrade the aircraft's landing gear, 
environmental control system, and auxiliary power units--the C-5's most 
unreliable systems. A number of independent studies have projected that 
C-5 modernization efforts could increase the C-5 MC rate as much as 
13.5 percent, while simultaneously reducing our cost of ownership.
    Several studies have recommended an operationally effective mix of 
RERPed C-5s and purchase of additional C-17 aircraft. America cannot 
afford to lose the niche filled by the C-5 fleet's organic capability 
or allow it to continue to atrophy.
    USTRANSCOM's documented inability to meet the warfighter's 
military-unique airlift cargo requirements led to the acquisition of C-
17s. To date, the C-17 program has delivered 113 of 180 authorized 
aircraft. While the approved 180 C-17 multi-year procurement plan is a 
big step in the right direction toward achieving needed capability, a 
more capable, versatile, and reliable strategic airlift mix should 
include C-17s and a correct number of fully modernized C-5s. This 
combination of aircraft provides a much-reduced average fleet age at 
the earliest date, while affording the needed flexibility to move 
outsize and oversize cargo over long distances and into short, 
unimproved runways. The C-17 has already proven exceptionally capable 
and reliable in airlifting our forces to the fight, no matter where 
that fight may be. It is the only aircraft capable of performing all 
missions: strategic airlift, tactical airlift, airdrop (key to 
strategic brigade airdrop), aeromedical evacuation, austere airfield 
operations, denied access, and special operations. In a ``come as you 
are'' world, we must continue C-17 investment. This versatile and 
reliable platform is the ``sure bet'' for our future force.
    AMC's venerable air refueling force is performing superbly in ONE, 
OEF, and OIF. Operations today are increasingly air-refueling 
dependent, and the force is delivering, but the strain is evident. Our 
concerns grow daily. The Tanker Requirements Study 2005 (TRS-05) 
supported our long-held position that AMC has a significant KC-135 
crew-to-aircraft ratio shortfall. The current active duty and Reserve 
component crew ratios of 1.36:1 and 1.27:1, respectively--inherited 
from the KC-135's Cold War days--are simply inadequate to meet our 
current contingency requirements. TRS-05 indicated a need for a 1.66:1 
crew ratio averaged across all scenarios, with 1.92:1 needed to meet 
the most demanding scenario. USTRANSCOM and the Air Force are working 
in concert to resolve this issue through funding and force structure 
initiatives. One proposal is to retire 68 of the oldest and most 
unreliable KC-135E-model aircraft from the ARC and replace them with 48 
of the more reliable KC-135R models from the active force, while 
retaining the current crews. The resulting offset would be reinvested 
in the remaining KC-135 fleet for improved crew ratios and maintenance.
    A review of TRS-05, as well as the KC-135 Economic Service Life 
Study (ESLS), further quantifies the future requirements on our 44-
year-old KC-135 force. TRS-05 reinforced the importance of our tanker 
fleet and the ESLS identified the steady (1 percent per year) cost 
growth and changing availability expected as we continue to operate our 
1950s vintage KC-135s into the future.
    To keep the KC-135 viable until a replacement tanker is brought 
into service, AMC is modernizing the aircraft with the GATM program. 
GATM, programmed for fielding between 2003 and 2016, adds increased 
communications, navigation, and surveillance capability, ensuring that 
our air refueling tanker aircraft have global access to ever-increasing 
restricted airspace. Without GATM, tanker aircraft may be faced with 
longer routes in non-optimum airspace resulting in longer flying times 
and less fuel available for offload.
    Additionally, 40 KC-135 aircraft will be modified to carry the 
Roll-On Beyond-Line-of-Sight Enhancement (ROBE) package. This small, 
removable payload, when installed, enables the KC-135 aircraft to act 
as an airborne data link between battle directors and the warfighters 
in theater or en route. This link gives all participants the ability to 
deliver the required information to the right location, at the precise 
time, and in an actionable format. The KC-135 ROBE-equipped tanker is 
the first in a family of scalable, multifunction, automated relay 
terminals (SMART) aircraft, a capability to be further developed and 
integrated into the proposed KC-767 tanker.
    There are several challenges facing the C-130 fleet. It consists of 
approximately 700 aircraft composed of 20 different models. USTRANSCOM 
operates 410 of 514 basic combat delivery C-130s through AMC. The 
average active duty aircraft is 28 years old, the number of C-130s is 
declining as individual aircraft reach the end of their service life, 
and older onboard equipment across the remainder of the fleet is 
rapidly becoming obsolete and cost prohibitive to maintain. To remedy 
these problems, AMC proposes acquiring 150 new combat delivery C-130Js, 
retiring an equivalent number of the least maintainable C-130s, and 
modifying those with the longest remaining service lives to a common C-
130 AMP configuration. The core of the new common configuration is a 
total cockpit avionics modernization incorporating GATM-required 
upgrades to communications, navigation, and surveillance systems.
    OEF originally highlighted the reengineered AE system, and lessons 
learned have driven further refinements and improvements that paid 
exceptional dividends during OIF's significantly higher patient 
movement tempo. Small but highly capable AE teams deployed forward and 
provided rapid casualty evacuation shortly after initial treatment. 
More than 17,000 patients have been evacuated during OEF/OIF to date. 
Within the CENTCOM AOR, over 95 percent of AE missions were flown using 
C-130s and C-17s, while C-141s performed the majority of the inter-
theater AE missions.
    Ongoing AE initiatives are integrating AE into operations, 
including stage management, airlift control elements, Air Mobility 
Control Centers, and theater Air Mobility Operations Control Centers. 
AMC has initiated an AE concept of operations (CONOPs), fully 
incorporating the AE mission into the mobility system to meet peacetime 
and wartime AE mission requirements. This CONOPs creates efficiencies 
through the use of multimission mobility aircraft with interchangeable 
patient care modules, integral litters, and patient support pallets. 
Use of multimission aircraft for the AE mission eliminates the added 
time and expense of procuring, operating, and maintaining purpose-built 
AE aircraft, and are needed as the last C-9 Nightingale AE aircraft 
will retire from service in fiscal year 2005.
    To help counter the worldwide proliferation of MANPADS, AMC has 
already begun fielding the large aircraft infrared countermeasures 
(LAIRCM) system on its C-17s and C-130s. The plan is to equip enough 
airlift and tanker aircraft with this laser-based system to support at 
least two small scale contingencies, while examining possibilities for 
protection of CRAF commercial aircraft. We also continue to partner 
with industry and other government agencies to develop systems that 
will enhance situational awareness for aircrews as well as provide 
improved protection from infrared and radar-guided threats in the 
future.
Sealift Readiness and Modernization
    Thanks to $6 billion in congressional funding for LMSRs, as well as 
increased funding for RRF readiness and significant enhancements to 
prepositioned ships during the past decade, our sealift force is vastly 
more capable than ever before. Strategic sealift is critical to our 
Nation's power projection strategy.
    The 20th LMSR was delivered last year, completing one of the 
largest strategic sealift acquisition programs in history, a program 
clearly validated by superb LMSR performance in the OIF deployment/
redeployment process. Additionally, the increased readiness standards 
and maintenance of our RRF have made it more efficient and better able 
to meet lift requirements than ever before. The RRF today is a well-
maintained, ready force of 31 surge roll-on roll-off ships and 37 
special-purpose sealift ships. MSC's surge sealift fleet, comprised of 
8 FSS and 11 LMSRs, regularly supports joint exercises, while its 
prepositioning ships provide forward-deployed combat equipment and 
sustainment supplies to the regional combatant commanders. Although our 
sealift force is more capable and ready today, we must address the 
challenge of rapid force closure.
    The latest assessment of mobility requirements as defined in MRS-05 
indicates that the total sealift cargo requirement is 9.62 million 
square feet, which has been the target capability for our organic 
sealift program. Recent operations, however, have shown that our 
current surge capability is only 6.81 million square feet. Lessons 
learned from OIF have confirmed two major changes that contribute to 
this reduced capability: (1) the actual mean stow factor on surge ships 
is closer to 65 percent when deploying force packages rather than the 
standard planning factor of 75 percent (reducing the lift capacity by 
1.31 million square feet), and (2) the entire lift capacity of the RRF 
was not used to transport surge unit equipment because of the 
cumbersome and lengthy loading/unloading process for some of the ships 
(further reducing capacity by 1.16 million square feet). Furthermore, 
OIF confirmed that the capability to load, sail, and unload our 
military's ``surge'' unit equipment in time for it to be effective for 
the combatant commander is critical. Fast roll-on roll-off ships 
(ROROs) are the most effective means of meeting this surge requirement.
    The importance that the evolving NMS places on the requirement for 
rapid force closure presents a new challenge to strategic sealift 
mobility. With this in mind, the speed of half the fleet (by capacity) 
is not capable of providing the global response from CONUS in the 
timeframes that are being projected for 2010 requirements. To meet 
future obligations, we must fund the fleet at appropriate levels 
commensurate with the requirement, maintain program vigilance, and 
establish a futuristic vision to sustain and recapitalize the required 
levels of sealift readiness and capability for the long term. The 
capability of today's surge fleet is well understood, and we look to 
the MCS to establish the correct vision for required future sealift 
mobility capabilities. Additionally, fiscal commitments toward the 
research and development of high-speed strategic sealift are required 
to help meet future sealift needs.
Infrastructure Readiness and Modernization
    Another vital component of USTRANSCOM readiness is the ability to 
project and sustain forward presence. Each transportation component 
command has forward-based units and deployed forces around the globe. 
SDDC operates at seaports worldwide, interacting with allied 
governments, militaries, and local authorities. These forward-based 
activities enable instant access to seaports, as well as to the lines 
of communication radiating from them. The MSC forward deployed staffs 
serve as focal points for MSC customers in their respective operating 
areas and provide direct links to MSC ships for maintenance, logistics, 
and other services. AMC maintains en route infrastructure worldwide to 
facilitate establishment of vital air bridges for the airlift of 
critical personnel and cargo in times of crisis. Modern infrastructure, 
in CONUS and overseas, is critical to effective and efficient strategic 
deployment.
    As a predominantly CONUS-based force, infrastructure means more to 
us today than ever before. Yet, we have fewer overseas bases through 
which we can operate, and access to those bases is never guaranteed, as 
experienced in Turkey's refusal last year to permit U.S. use of bases 
to facilitate the OIF deployment. Similarly, the increasing OPTEMPO is 
stressing this diminished base structure more than ever. Along with the 
Services and regional combatant commanders, USTRANSCOM must continue to 
monitor our global mobility infrastructure, keep up with needed repairs 
and improvements, and remain prepared to operate in new or bare base 
environments when required.
    In CONUS, the Army has made substantial investments in its combat 
equipment loading facilities at power projection platforms and its 
containerization facilities at ammunition depots. These improvements 
have significantly streamlined the loading of 41,404 railcars and 
export of 7,447 ammunition containers throughout fiscal year 2003.
    Overseas, the United States European Command (USEUCOM), CENTCOM, 
USTRANSCOM, and the Joint Staff, through the European En Route 
Infrastructure Steering Committee (EERISC), oversee infrastructure 
requirements for the primary en route air mobility bases in USEUCOM to 
support CENTCOM operations in Southwest Asia and staging operations for 
Africa. Partnering with the Defense Logistics Agency (DLA), the EERISC 
has developed a comprehensive plan to improve the infrastructure at 
those bases. The EERISC has identified, validated, and collaboratively 
championed the need for more than $700 million in fuel hydrant, ramp, 
and runway projects throughout the European theater to support mobility 
requirements. Likewise, we are working with USPACOM and DLA to identify 
and fix en route base shortfalls in the Pacific region in support of 
Northeast Asia contingencies and staging for operations in Southeast 
Asia. The USPACOM En Route Infrastructure Steering Committee (PERISC) 
has identified and validated the need for over $500 million in 
improvements throughout the region. DLA and Air Force budgets now 
support all identified en route fuels projects. Significant 
construction began several years ago and continues in fiscal year 2004, 
but the infrastructure will not get well (i.e., fully meet the 
requirements laid out in our war plans) until the end of fiscal year 
2007, and then only if all funding and construction remains on track.
    These European and Pacific en route projects are being implemented 
primarily to support the MRS-05 established passenger and cargo 
throughput requirements. However, additional infrastructure to support 
the WOT is required and being studied by both the EERISC and PERISC. 
Moreover, today's current operations, combined with existing studies, 
further demonstrate the need for expanded hazardous cargo capabilities 
at en route and theater airfields around the globe. To this end, 
USTRANSCOM is working with combatant commanders, Joint Staff, and DLA 
to implement a truly global en route infrastructure system.
    Efficient cargo movement through aerial ports requires appropriate 
materiel handling equipment (MHE). The Air Force's current fleet of 40K 
loaders, wide body elevator loaders (WBELs), and 25K loaders is old, 
deteriorating, and suffering from poor reliability and maintainability. 
Fortunately, we are fielding 318 new Tunner 60K loaders to replace all 
376 40K loaders and 147 of the 206 WBELs. To date, AMC has fielded 264 
of these capable new loaders. They have a much-improved mean time 
between maintenance, are compatible with all military and commercial 
cargo aircraft, and can load six standard Air Force 463L pallets at a 
time. The new Halvorsen (25K) loader is smaller in size and weight than 
the old 25K loader, is transportable on C-130s, C-17s, and C-5s, and is 
more reliable than its predecessor. USTRANSCOM has a requirement for 
618 Halvorsen loaders, which supports unfilled authorizations, and 
replaces the 1960s vintage 25K loaders and remaining 59 WBELs. 
Currently 312 Halvorsen loaders are funded, leaving 306 unfunded for 
subsequent Program Objective Memorandum (POM) submission. Halverson 
deliveries began in fiscal year 2001 with 236 delivered to date.
Readiness: Commercial Industry and Labor Teammates
    Our readiness also depends on timely access to militarily useful 
commercial transportation. USTRANSCOM's superb relationship with the 
U.S. commercial transportation industry and supporting labor 
organizations allows DOD to leverage significant capacity in wartime 
without the added peacetime cost of sustaining comparable levels of 
organic capability. For example, under full activation, CRAF provides 
93 percent of our international passenger capacity, 98 percent of our 
AE capability to CONUS, and 41 percent of our international long-range 
air cargo capacity. The CRAF program affords peacetime business to 
participating airlines in exchange for their pledge to provide 
specified capacities in wartime. CRAF's ability to dramatically 
influence operations literally overnight was never more apparent than 
immediately following the terrorist attacks of September 11. On 10 
September 2001, USTRANSCOM had 27 organic military aircraft in service 
on key express and channel movements. On 13 September 2001, after the 
historic shutdown of the airways, we again had 27 aircraft in service 
on those same routes. But this time, there were only 3 military 
aircraft augmented by 24 commercial aircraft. Having unencumbered 24 
military aircraft via the voluntary commitment and patriotism of our 
CRAF partners, USTRANSCOM could immediately answer the call for ONE.
    Our CRAF partners, both voluntarily and under activation, continue 
to support critical wartime requirements and, in exchange, deserve as 
predictable a safeguard of their capital investments as possible. In 
this respect, the Federal Aviation Administration's Aviation War Risk 
Insurance is vital to assure our CRAF carriers that they can recover 
from significant loss or damage incurred in support of DOD. The CRAF 
program demonstrates that all U.S. air carriers, large and small, are 
key to a robust civil air industry. Therefore, we support the Fly 
America statute (49 USC 40118) and what we refer to as the Fly CRAF 
statute (49 USC 41106) as they serve to support and sustain this 
critical national asset.
    Because of the increasing requirements related to the deployment of 
forces in preparation for OIF, USTRANSCOM activated the CRAF Stage I 
passenger segment on 8 February 2003. Stage I remained activated 
through 18 June 2003, when major combat operations had ceased and 
initial force redeployments had occurred. Under CRAF activation, each 
aircraft comes with four crews comprised of (non-reservist) U.S. 
citizens, and the aircraft are dedicated to DOD. This combination 
allows for greater security, scheduling flexibility, and responsiveness 
to changing requirements. Additionally, activation removes all 
questions about war risk insurance coverage as the non-premium war risk 
insurance and DOD indemnification programs cover hulls, liability, and 
crew insurance coverage for all DOD missions. For this activation, a 
total of 51 aircraft and associated crews were activated. Their 
associated carriers made the aircraft and crews available for their 
first missions within 24 hours of the tasking, and these forces 
significantly contributed to USTRANSCOM's ability to rapidly flow 
manpower to the region.
    The Voluntary Intermodal Sealift Agreement (VISA) is the maritime 
equivalent of the CRAF program. Under VISA, DOD has access to 
commercial U.S.-flagged sealift capacity and intermodal infrastructure 
in return for peacetime business preferences. Because pre-negotiated 
contracts with the carriers permit early access to additional lift 
capacity, the time required to close forces for the counterattack phase 
of war operations can be significantly shortened. VISA participants 
move over 80 percent of wartime sustainment cargo.
    Force deployment requirements in support of OEF/OIF were met with 
organic shipping assets and commercial shipping acquired through MSC 
contracting initiatives. Therefore, activation of VISA was not 
required. However, VISA could conceivably be called upon to meet 
emerging sustainment requirements.
    MSP, another critical element of our commercial sealift program, 
provides assured access to sealift/intermodal capacity and a readily 
available, highly trained and qualified work force of merchant mariners 
employed in U.S.-flagged shipping. The recent authorization of the 
Maritime Security Act of 2003 expands the current MSP fleet from 47 to 
60 vessels. This increase allows the opportunity to better assure 
access to U.S.-flagged ``low density-high demand'' assets (e.g., RO/RO 
and heavy lift ships). MSP provides an underpinning for VISA by helping 
to guarantee the continued presence of a minimal U.S.-flagged 
commercial fleet operating in international commerce and that fleet's 
availability to provide sustainment sealift capability in time of war 
or national emergency. This guarantee is particularly critical should 
the U.S. find itself in a position where it must act alone. 
Additionally, this increase in fleet size should play a critical role 
in expanding the U.S. mariner base. Currently, the MSP fleet accounts 
for more than 900 crew billets that provide jobs to roughly 1,800 
trained and qualified mariners. Finally, MSP provides financial 
assistance to offset the increased costs associated with operating a 
U.S.-flagged vessel. In return, participating carriers commit vessel 
capacity and their intermodal transportation resources for DOD use in 
the event of contingencies.
    In concert with their commercial aviation and maritime 
counterparts, our Nation's commercial longshoremen continue to play an 
integral role in the DTS, facilitating SDDC marine terminal operations 
at strategic seaports both in CONUS and overseas. Throughout the 
massive deployment operations in preparation for OIF, between 400 and 
500 longshoremen supported 24-hour operations at U.S. strategic ports 
alone. Their herculean efforts made a tremendous difference in our 
ability to load and deliver combat capability quickly and safely to 
Southwest Asia.
    Along the lines of the CRAF and VISA programs, USTRANSCOM is 
currently investigating commercial assured access to surface 
transportation assets, specifically, commercial chain tie-down rail 
flatcars. Chain tie-down rail flatcars are the preferred and primary 
method used to support large movements of military vehicles and 
equipment from ``fort to port'' and vice versa within CONUS. Currently, 
there is a shortfall of approximately 2,000 rail flatcars (commercial 
and DOD-owned) to support MRS-05 surge requirements. The long-term 
issue is that, even with a recent 10-year life extension, we will see 
large-scale mandatory retirement of the chain tie-down rail flatcars in 
the commercial fleet (slightly over 5,000 cars) beginning in 2014. 
There is no current industry plan to recapitalize, based on the fact 
that such flatcars are primarily used to move military equipment only. 
USTRANSCOM and SDDC are working with the railroad industry to ensure 
that sufficient rail transport capability exists, both now and in the 
future, to handle the CONUS movement of equipment, ammunition, and 
supplies as part of force deployment and redeployment operations.
                   transportation systems of tomorrow
    The need for more responsive and flexible lift, getting it where it 
needs to be, when it needs to be there, cannot be overemphasized. New 
mobility platforms as well as enhanced infrastructure technologies and 
process/organizational improvements are essential to meet the 
challenge.
    In conjunction with the Joint Staff, Services, and other combatant 
commands, USTRANSCOM participated in a Defense Planning Guidance (DPG)-
directed study of future (2020) mobility platforms known as the 
Advanced Mobility Concept Study. This study provided the initial 
identification and prioritization of the future mobility assets 
required to support DOD's transforming forces and operational concepts 
for 2015-2020. The study recommended:

          (1) OSD include appropriate direction in POM SPG-06 to 
        initiate research, development, testing, and evaluation on a 
        Shallow Draft High-Speed Vessel, Theater Support Vessel, Super 
        Short Take-off and Landing Aircraft, Global Range Transport, 
        and Joint Rapid Airfield Construction. OSD and the Services 
        will continue to address technical readiness, cost, port 
        analysis, and impacts on the current programming cycle.
          (2) Conduct an excursion to the next Mobility Capabilities 
        Study that considers transformed forces and mixes of advanced 
        and current lift in the 2020 timeframe.
          (3) Ultra-Large Airlifter (ULA) continue as a platform for 
        further related studies involving advanced lift platforms since 
        Defense Advanced Research Projects Agency (DARPA) is currently 
        funding its research as a multi-mission platform.

    USTRANSCOM, working with industry, is actively exploring a wide 
variety of future technologies and concepts for military and commercial 
use. In terms of sealift, we are studying militarily useful high-speed 
vessels (HSVs) that provide the potential to enhance intra-theater lift 
capability. These shallow draft high-speed platforms allow access to a 
greater variety of unimproved ports, providing enhanced anti-access 
mitigation. Currently, HSVs are capable of transporting over 1,000 
passengers and more than 500 tons of cargo at speeds in excess of 40 
knots.
    From an air mobility perspective, our interest lies in high-speed, 
low-observable multimission strategic mobility aircraft with short 
take-off and landing as well as autonomous approach capabilities. In 
the future, it makes sense to look at a family of transport category 
aircraft that could satisfy multiple needs. Variants of a common 
airframe could be built to serve as a tanker, an airlifter, a 
penetrating aircraft for the Special Operations Forces infiltration 
mission, a gunship, or an intelligence, surveillance, and 
reconnaissance platform. This approach would have standardized 
cockpits, engines, and systems to minimize overall development expenses 
and reduce life-cycle costs.
    We need a collaborative effort between the Joint Staff, Services, 
and other combatant commanders to shape our planning, policy, and 
procedures as technology moves from test and evaluation into 
acquisition. All of the types of systems that I just mentioned would be 
costly to develop, procure and operate. Much work remains to be done to 
determine how much they would add to our overall military capabilities, 
determine how costly it would be to pursue these individual systems, 
and decide on the right mix of systems and capabilities in which to 
invest. We must make decisions concerning future employment of this 
technology that are consistent with the best interests of our overall 
transportation system and our warfighters.
                   final thoughts from general handy
    All that matters, and what each of us in USTRANSCOM is pledged to 
do, is to provide absolute, complete, and total support to the 
warfighter.
    On any given day, the USTRANSCOM team of professionals provides 
critical strategic transportation to a host of U.S. and international 
agencies. Today, USTRANSCOM is simultaneously supporting every single 
combatant commander performing real-world operations. No matter what 
the mission assigned, the men and women who operate USTRANSCOM's air, 
land, and sea components are first out the door. There are not many 
headlines for what they do, but these dedicated professionals execute 
their global military mission every day in defense of our country.
    I am extremely proud of today's USTRANSCOM and honored to lead the 
superb men and women who comprise our national defense transportation 
team. USTRANSCOM will continue to provide the most effective and 
responsive mobility capability the world has ever seen and, in light of 
recent developments, will endeavor to create that same level of 
efficiency and interoperability through a transformed DOD distribution 
process.
    You can rest assured that USTRANSCOM's crystal clear vision of the 
way ahead will provide constantly improving, seamless, and responsive 
support to the warfighters. America's military might moves with us, and 
we are stepping out smartly.

    Senator Talent. Well, I always appreciate brevity in 
statements by witnesses----[Laughter.]
    But I am not so sure you are not going a little bit 
overboard. I am happy to do that, and your statement is 
available for the record.
    Let us then get to the questions I have. Again, when 
Senator Kennedy comes, I can defer to him for his opening 
statement.
    In the report on the relevancy of the MRS-05 to the current 
NMS that was just delivered to the committee, the report states 
that there is a requirement to continue the production of C-17 
beyond the current multiyear procurement. That procurement, of 
course, will take us to 180 aircraft, and there is a minimum 
requirement for 222 C-17s.
    The report also states that the moderate risk strategic 
airlift requirement of 54.5 MTM is understated and that the 
range will more than likely fall between 57.4 and 60 MTM.
    First of all, my gut sense is that that revised requirement 
may itself be rather conservative. Do you want to give me a gut 
sense of how you feel about that?
    General Handy. Yes, sir. My view is until we can do a very 
thorough MCS which would look at air, land, and sea, we truly 
will not know the exact accuracy of any of those figures. I am 
on the record as saying that, even with regards to MRS-05, done 
in 2000, reported out in early 2001, it became immediately an 
historical document because it could not predict September 11, 
2001, it could not predict the global war on terrorism, and it 
could not possibly predict the creation of U.S. Northern 
Command and a litany of other things that have happened since 
then.
    All of those things have contributed to the challenge that 
we face as logisticians to move the Nation's military, 
supplies, and sustainment around the world. The thing that we 
are most concerned with is accuracy of that analysis. Directly 
to your question, I am very anxious to see what the analysts 
can come up with in the year that the Office of the Secretary 
of Defense for Program Analysis and Evaluation (OSD PA&E) and 
the Joint Staff J-4 (logistics), with our help, are able to 
look at air, land, and sea, to determine what is the 
requirement. I say that based upon our experiences for 2002 and 
2003 in Afghanistan and Iraq specifically.
    Senator Talent. Given the changed assumptions, the new NMS, 
and what we have learned from Operation Iraqi Freedom (OIF), an 
increase of only three to six MTM in the estimated requirement 
just seems to me to be just extremely conservative, 
particularly if we are trying to err on the safe side, because 
one thing everybody agrees is that this military strategy is 
not going to work without adequate lift.
    General Handy. Well, and it certainly is air, land, and 
sea, as all three of us and our staff know, and literally the 
152,000 people that support USTRANSCOM in this business of 
ours. One of the things that pains us all is the fact that when 
it comes to our crunch, as we saw when General Tommy Franks was 
trying to come up with his plan for a what-if Iraq, invariably 
on our side of the table we were negotiating times, dates, and 
force flow because we do not have the assets to do them in a 
timely fashion.
    When you look at the delta between this look at MRS-05 and 
our experiences in 2002 and 2003, it has to be more than two to 
three MTM/D. So from the combatant commander's perspective, I 
remain very concerned about what is the real requirement and 
the fact that we are in a Nation that cannot wait for things to 
get delivered; we have to do it very quickly, very surgically 
and safely.
    Right now we are operating with a fleet that is incredibly 
safe, but inadequate for the challenges that the Nation faces.
    Senator Talent. Yes, I would have thought that the 
requirement of 3 to 6 MTM/D additional would be justified just 
by what we have learned from OIF, not even counting the change 
in the NMS, which clearly puts a greater emphasis on lift than 
the two theater war strategy did.
    General Handy. The 1-4-2-1 strategy that we have right now 
is more challenging for the transportation side of the house--
in fact, truthfully, the whole logistics side of the house--
than the two MTWs that we used to look at and upon which the 
54.5 MTM/D is based.
    Senator Talent. Is a new study under way, by the way, 
addressing that, too?
    General Handy. I am sorry, sir?
    Senator Talent. Has the Department ordered the new study? 
Is that under way?
    General Handy. It is due to start this spring and will take 
approximately a year. Our hope is that it can be done in that 
amount of time. If we look at how long it took MRS-05, I fear 
that it may take even longer than that. But our hope is a year.
    Senator Talent. If indeed we are going, as I hope we do, to 
implement, for example, another multiyear for C-17, we really 
need to get going on planning for that before a year and a half 
from now. Because, given the base issues and the production 
line issues and the rest of it, we need to start sending that 
signal sooner than that. Would you not agree?
    General Handy. Senator, absolutely. The long lead moneys 
for a second multiyear, if we can get that approval, they need 
to be inserted in the fiscal year 2006 budget. So it is clear 
that we will have the debates of the fiscal year 2006 budget 
before we are able to look at the data from a completed MCS.
    Our plea from a USTRANSCOM perspective throughout the 
Department is to urge the MCS take place, that we also proceed 
parallel with an endeavor to get the multiyear procurement for 
the next block, which would at least get us to the MRS-05 
number of 222 plus. That time allows us to keep the line open, 
keep C-17s that we know we need headed our way. By the way, 
they are coming at 15 a year, so this is not happening fast. 
Getting up to 222 will take some time.
    In the mean time, then we will know what the study says and 
we can determine what the final number of C-17s is likely to 
be.
    Senator Talent. Because even under the current revised 
study, they state a minimum requirement of 222.
    General Handy. Yes, sir.
    Senator Talent. Even though it is minimum. Clearly we need 
to get going. I am glad you agree with that.
    Do you think there is an increasing need for C-17 intra-
theater airlift as well as inter-theater airlift?
    General Handy. Yes, I do. In fact, we have used them 
successfully in both Afghanistan and Iraq. At any time we have 
felt that we had the need to insert them in the theater in 
their intra-theater role or the Combined Force Air Component 
(CFAC) commander had that same requirement, we would dedicate 
them to the theater and they would exercise that intra-theater 
capability quite successfully, or direct delivery from the 
strategic lift directly into a place in either Afghanistan or 
Iraq, so that it constitutes a combination of inter-theater and 
intra-theater capability.
    Senator Talent. I doubt that the intra-theater use was--I 
should check on this--figured in the original air mobility 
study. There is another use on top of what was originally 
figured, which suggests that we need more.
    By the way--and this is a cheap applause line for me 
because I know what the answer is going to be--how well is the 
C-17 performing? If you do not say it is performing 
excellently, I am going to be the most shocked and dismayed 
person in the Capitol.
    General Handy. Certainly, as the combatant commander, in 
all sincerity, we have some tremendous capabilities in this 
command, there is no question about that. All the weapons 
systems have performed magnificently for air refueling and 
airlift, and I cannot forget my two partners on either side--
the whole team.
    But on the air side, the C-17 has been the absolute 
diamond. There is no question about it that this aircraft has 
done the things that many people in my career said, ``You know, 
General, you will never do this with the C-17, you will never 
put it in the fight, you will never subject it to threats, and 
you will never put it in a dirt runway in a combat zone in a 
high-threat area.'' All those naysayers have disappeared.
    I do not have those kinds of phone calls any more, because 
this is an aircraft that we have done that with. We have put it 
in the dirt at Rhino LZ in support of the Marines, in the dark 
of the night in a combat zone, with a high threat environment. 
We have continued to do things with this aircraft. The 173rd 
Airborne Division drop into Bashur was a clear example of its 
capabilities.
    We continue to be very proud of what it does for the 
warfighter in that theater of operations, and we will continue 
to run it up front because it has those capabilities.
    Senator Talent. Yes, it is a great aircraft.
    I will pursue one other line of questioning, then recognize 
Senator Kennedy. I will let him get settled. I may come back to 
this, but let me just open this. I am very interested in the 
new role as distribution process owner (DPO) that has been 
given to USTRANSCOM. It puts you in charge of a process that 
crosses other agencies and commanders' areas of responsibility, 
including the Defense Logistics Agency and the combatant 
commander.
    Expound a little bit on the command relationships that you 
think are necessary for you to be responsible for that process? 
What are you doing to develop and enhance those relationships 
in the course of the transition? What kind of time line are you 
anticipating? Discuss for me, if you would, how the whole 
process is going and how the relationships are being built?
    I think it is a great idea if it is done smoothly and if 
everybody is committed to it. Discuss that, if you would.
    General Handy. Yes, sir. As you well know, September 16 of 
last year the Secretary of Defense made that declaration in a 
memo to the staff and to me personally out at USTRANSCOM, 
giving us those distribution authorities. Obviously we did not 
just wake up on the morning of the 16th of September and 
realize those authorities. We had worked that with the 
Secretary for almost 24 months prior, suggesting that the 
traditional role of USTRANSCOM from port to port needed to be 
improved because the management of the defense supply chain was 
much more a challenging problem than anybody ever recognized.
    Senator Talent. I am going to put in the record, I guess, 
the graph from the briefing on this. You cannot see it, of 
course, but you have seen it.
    General Handy. Yes, sir.
    Senator Talent. The Department of Defense supply chain as 
it existed before you began implementing this.
    General Handy. Yes, sir.
    Senator Talent. Which you only have to take one look at to 
realize that something needed to be done. It looks roughly like 
the organization of the committees of the Senate, except that 
somehow we make it work. Right, Senator? So I am going to put 
this in the record, but please go ahead.
    [The information referred to follows:]
      
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
      
    General Handy. So with those authorities, which gave us the 
process ownership--and that is a key part of that memo, we are 
responsible for the distribution process, and that gets at the 
heart of your question. Immediately if in this endeavor we did 
not assume that logistics is a team sport, and in order to 
fulfill that role as the process owner, we needed to rally the 
entire team of logisticians.
    In the buildup to that declaration, we have worked very 
hard to get all of the partners--the Defense Logistics Agency, 
the Service logisticians, and each of the major commands of the 
Services--well informed about what we together believed we 
could do, with the leadership of a combatant commander, which, 
as that chart points out, no one is really in charge. So now 
someone has been given that authority. When it comes to command 
relationships, logistics flows horizontally and vertically 
throughout all command relationships, and it is one thing that 
all logisticians realized.
    As we have pulled together and as we have teamed, we have 
realized that by having a single point of authority we could 
knock down a lot of the challenges, brick walls, and roadblocks 
that traditionally had stymied each one of us individually. Now 
there was a team captain to rally around, and that is 
essentially the role we have played.
    Then if you look at the theater, one of the first things we 
suggested to General John Abizaid, I sent him a letter early in 
December saying I would like to put a USTRANSCOM-like team in 
U.S. Central Command (CENTCOM) with logisticians who had, in my 
terms, a Ph.D. in logistics, and I support them with all of the 
information technology (IT) they could possibly need, 
everything that exists at USTRANSCOM we want to put down in 
your theater. You decide where, and, in fact, your J-4, your 
logistician, can command and control it.
    Senator Talent. That is what I was going to ask. They are 
under the authority of the combatant commander, is that 
correct?
    General Handy. Yes, sir.
    Senator Talent. Okay.
    General Handy. What we are able to do is connect both ends 
of that supply chain. It represents that umbilical from 
USTRANSCOM right out to our customer, CENTCOM--not just the 
combatant commander, but his staff and his subordinate 
commanders.
    The clarity with which they see the logistics challenge 
within the theater gave us better than 20-20 visibility and it 
highlighted for the theater commander the incredible visibility 
that he had lacked up until that point. I tell folks that it 
would, frankly, take us quite a bit of the day to talk about 
them all, but it was not just low-hanging fruit, in the 
military term. This was fruit that was laying on the ground 
almost going rotten; it was just easy to pick up.
    We saw within 24 hours of this team arriving in Central 
Command's area of responsibility that they were already 
reporting back successes, and it continued on a day-to-day 
basis as we constantly talked with them, worked with them, to 
create successes for the warfighter through the better 
management of not only the distribution, but of the deployment 
and redeployment management processes.
    So I do not want to overstate it. Obviously I am passionate 
about it. We and the team that we support and that support us 
are absolutely dedicated to this endeavor, and it is so full of 
goodness that you cannot help but get wrapped up in the 
success. So we are very pleased, and we have not become afoul 
of command relationships, which is the heart of your question. 
It has bonded us dramatically. The other combatant commanders 
have all voiced the opinion: ``You know, John, I do not know 
what it is, this Deployment Distribution Operations Center 
(DDOC) that you have, but I want one.''
    I just came back from Korea and General Leon LaPorte begged 
me to, as soon as we can turn our heads from CENTCOM, could we 
please come to Korea and give them the same kind of capability, 
and we intend to do that.
    Senator Talent. We ought to ask the combatant commanders 
(CINCs) just for the record just to put in their view of it to 
this point. Maybe we will go ahead and submit that so we can 
get it in the record and make it complete.
    [The information referred to follows:]

    USTRANSCOM conducted a quick survey of CENTCOM and United States 
Forces Korea (USFK). The responses from both CENTCOM and USFK provide 
overwhelming support for the regional DDOC. Feedback indicated that the 
DDOC, which has been tested in both CENTCOM and USFK, is absolutely the 
way we need to do business. The DDOC will make the combatant commander 
even more effective and efficient in the functional areas of 
deployment/redeployment, intra-theater distribution, and sustainment.

    Senator Talent. Well, we may go a little bit more into that 
in a little while.
    General Handy. Okay.
    Senator Talent. Senator Kennedy is here and I want to 
recognize him. Why do you not do an opening statement and then 
go into your questions?

             STATEMENT OF SENATOR EDWARD M. KENNEDY

    Senator Kennedy. Thank you, Mr. Chairman. I want to welcome 
all of our witnesses and thank you for calling the hearing.
    The subject of the strategic lift is not a new one for our 
subcommittee. We have taken significant actions over the years 
in dealing with the strategic lift issues on a bipartisan 
basis. The subcommittee played a significant role in 
establishing the USTRANSCOM. We encouraged the DOD to focus on 
strategic sealift issues and urged the Department to conduct 
the MCS.
    It seems unlikely, however, to undertake the original MRS. 
We authorized the needed resources for strategic sealift 
shipping. We not only helped restructure the C-17 at the point 
when many were ready to cancel the program, but we helped 
resolve the controversy surrounding it. We supported the 
maritime prepositioning force enhancement (MPF(E)) program to 
provide an additional ship for each MPF squadron.
    Today's hearing continues the subcommittee's strong 
bipartisan interest in the broader strategic lift policy issues 
facing the Nation today. We understand the Department has 
launched a new review of strategic lift needs, a study called 
the MCS. It seems unlikely, however, that this review will lead 
to major reductions in strategic lift requirements since our 
recent experience would indicate the current strategic lift 
capability needs to be enhanced. In fact, in response to our 
committee's report on the National Defense Authorization Act of 
Fiscal Year 2004, General Handy had submitted a report 
indicating the conclusions of the MRS-05, regarding strategic 
airlift needs understate the real requirements.
    We look forward to hearing from General Handy about the 
quick-look report. I also look forward to hearing from our 
witnesses about how our strategic mobility force performed in 
Operations Enduring and Iraqi Freedom.
    Now, General Handy, the committee report last year required 
you to submit a report, your assessment of whether the 
requirements--and I know our chairman got into some of this, 
but we might go over some of the ground, but I have some 
particular areas that I am interested in and want elaborated--
for strategic lift included in the MRS-05 remain valid or 
whether they were too low or too high.
    You submitted the requested report. If I may paraphrase, 
that report concludes that MRS-05 requirements for airlift 
understate the real need, C-17 production needs to continue 
beyond the plan of 180 aircraft, and we need to upgrade an 
appropriate number of C-5s. While the MRS-05 analysis indicated 
a requirement of having 54.5 MTM/D in airlift, your report 
indicates that the new requirements are likely to be 57.4 to 60 
MTM/D.
    Now, we have increased the planned buy of C-17 aircraft 
from 120 to 180 aircraft, and your report indicates that we 
need to buy at least 42 C-17s beyond that. If we kept all our 
current C-5 fleet and buy the full 222 C-17s your report cites, 
what would be our capability in terms of ton-miles per day?
    General Handy. Senator, I would respond by saying that is a 
number I believe is greater than the 60 MTM/D, if you add all 
that up. But I am still more concerned about the requirement 
that we have to move. What is the real requirement? What would 
the MCS that the Department is about to launch, what is that 
real number?
    So our position until that number is determined is to ramp 
up as many C-17s as we can and begin the Avionics Modernization 
Program (AMP) and Reliability Enhancement and Reengineering 
Program (RERP) on as many C-5s as we possibly can, not knowing 
what the target is.
    Senator Kennedy. Let me come back to that because you are 
going to have to have advance lead funds for the C-17, I would 
imagine, before that report is completed. Your report talks 
about ``an appropriate number of C-5s.'' Why do you use--I know 
it is in part classified, but the declassified, to meet the 
current, C-17 production rates must continue uninterrupted and 
an appropriate number--what are we talking--should be 
modernized, that will meet the merge.
    What are you hedging on in that?
    General Handy. From my perspective, it is how many can we 
get modified, how many C-5s can we ultimately run through? We 
have currently funded all of the AMP and we are putting as many 
dollars as we can against the RERP program. If you look at the 
time it takes to run both those programs, the C-5A model 
portion of the fleet may, in fact, age out from under me. I 
remain concerned about how many can we ultimately get modified, 
and that is the basis for that some ``appropriate number.''
    We have to certainly take into account the time it is 
taking to get to that endgame.
    Senator Kennedy. Well, in the previous years the Air Force 
had intended to modernize the avionics in all C-5s, C-5As, and 
C-5Bs. This year the budget documentation indicates the Air 
Force is going to stop the avionics after modernizing 55, and 
the picture is even less clear with the RERP program.
    General Handy. From a USTRANSCOM perspective, I have to get 
all 112 remaining C-5s AMP'ed. So our pressure--and I 
appreciate what the Air Force is doing, but it will always be 
to get the AMP on every single existing C-5.
    Senator Kennedy. What about the re-engining program?
    General Handy. As many re-engined as we possibly can, 
depending upon when the engineers come back with the test of 
the tear-down bird at Robins right now, how well the test goes 
on the two Bs and the A in the RERP, and whether or not that 
modification is really going to do the things that the 
operational requirements document says it must do. That will 
determine how quickly we can get and how many we can get of the 
C-5 fleet under the RERP.
    Senator Kennedy. Okay. Where are we on that timeframe? We 
gave you dates and times, but I cannot recall. Give us a sort 
of a progress line on that, can you?
    General Handy. It looks right now by engineering data the 
tear-down at Warner Robins is going to take about 24 months. 
Now, we have some preliminary data already, but it is way too 
early to draw a conclusion. We continue to press the Air Force 
as best we can for that analysis.
    Senator Kennedy. Twenty-four months?
    General Handy. Yes, sir.
    Senator Kennedy. It takes 24 months?
    General Handy. It is a very detailed analysis of the tear-
down of the aircraft. They literally are taking it apart and 
examining features of the aircraft that will give us that 
insight into how well that will last into the future. I am very 
hopeful that it will be positive. That is one challenge to us.
    Then the RERP modification starts at the end of the AMP 
modification. There is some overlap, but as soon as the AMP is 
complete then we will start that test of the two Bs and the A 
to determine if they are capable of being modified. The 
contractor is convinced that they are. I am certainly hopeful. 
We need them to be. But to get the mission capable (MC) rate up 
to 75 percent across the fleet will be a significant challenge. 
That endeavor will be somewhere in the 2010-2012 timeframe.
    There is a lot of time that is going on between now and 
then.
    Senator Kennedy. Well, it is a lot of time, that is true, 
because it is going to take a lot of time to get to the 
delivery of these additional C-17s as well.
    General Handy. Yes, sir.
    Senator Kennedy. I raise this because at the hearing in 
2001, before the Department released the MRS-05, General 
Robertson was asked about buying more C-17s and re-engining the 
C-5 aircraft as a way of meeting the lift. He said: ``The re-
engining of the C-5 is the most cost-effective solution to 
closing the gap on a MTM per daily basis. Basically, we project 
it will cost about $48 million a copy to re-engine the C-5. A 
new C-17 costs you somewhere in the vicinity of $150 to $175 
million, depending on the terms of the new multiyear contract, 
which is why we recommend both solutions. We have to re-engine 
the C-5 and we have to continue to buy C-17s.''
    That was pretty specific, pretty definite, and it also 
demonstrated a hard view in terms of the economics. We are 
looking at scarce resources. We want to do what needs to be 
done, but we are also looking at the scarce resources. We are 
looking at a budget that is hurting and we have some time lapse 
here before we are going to get the delivery of these 
additional kinds of planes. We have a very important need.
    I am mindful of what you said about the new mobility study. 
We discussed the quick-look report regarding likely changes in 
the airlift needs based on later information than was available 
to the Department in developing the MRS. I understand the Joint 
Chief's plan to conduct, as you mentioned, a comprehensive 
review of lift requirements, which is being called, as you 
mentioned, the MCS.
    This review will be the basis of assessing future strategic 
lift modernizations, including how many C-17s. The Department 
will need to make a decision whether to buy more than the 
current planned 180 in the fiscal year 2006 budget. The 
Department intends to begin the study this summer and complete 
the work some time next spring. That is March 2005.
    First of all, should we believe that the Department will be 
able to complete the comprehensive mobility study within 8 to 
10 months when the original MRS, the bottom-up review, and MRS-
05 all took substantially longer?
    General Handy. Senator, I would say I share the concerns 
and tone of that question. I have said for sometime now as the 
combatant commander that we really and truly need to nail down 
the real mobility capabilities requirement as soon as possible. 
I would love to have had it before the fiscal year 2006 budget 
discussions because I have to have long lead time in there. I 
am concerned--I do not want to rush a study, but we absolutely 
need to have it done, and I am hopeful that they can, with our 
help, get the study done in that year that they have allocated. 
But that, I have to confess to you, is a concern I have.
    Senator Kennedy. Well, to the extent the MCS supports the 
quick-look report and confirms we need more airlift, will the 
study identify the best way to achieve the added capability?
    General Handy. I do not know what the exact target of the 
study will be in terms of the questions and answers they give. 
What we have asked for is that the study not just look at air, 
but air, land, and sea, because in our view it is quite 
possible that sealift in some cases might be able to offset 
some of the airlift requirements of the future. So it is how 
many ships do we need, what is that capability; and then, of 
course, within the air side, how many of the types of aircraft 
do you need, C-17s, C-5s, or even improved C-130s.
    All of those questions are ones that we hope to drive into 
that study so that we have some good analysis to go forward on.
    Senator Kennedy. Well, I think your answer is very 
responsive. I did not know whether that was actually intended 
to be included in that study or not. I see heads nodding behind 
you, so I gather that is the case--that you will get the 
balance in terms of air and sea in the study, but also you are 
going to identify the best way to achieve it even within the 
airlift capability?
    General Handy. Yes, sir.
    Senator Kennedy. What is going to be the basis on which the 
Air Force decides on whether to include the advance procurement 
funds in fiscal year 2006 if you are not going to have the 
benefit of the study?
    General Handy. From the combatant commander's perspective, 
the line closes in fiscal year 2008. If there is no long lead, 
then we run the potential of incredibly increased costs. If the 
study comes out, you find you need more than 180, if you did 
not have the long lead in the fiscal year 2006 budget, now the 
line is closed or closing and you have to infuse that many more 
dollars to open it up or try to put it on life support. I think 
that will be the key linchpin for the Air Force in the decision 
of the C-17, at least to put the long lead in.
    From USTRANSCOM's perspective, we are urging them to press 
with long lead and at least have those dollars in the budget.
    Senator Kennedy. General Dunwoody, the Army has been 
planning to buy a Theater Support Vessel (TSV) to fill a 
mission of providing intra-theater logistics. I understand the 
Army has been participating in leasing a catamaran vessel that 
the Army has been using to test operational concepts, including 
using the leased vessel in the Persian Gulf.
    Can you give us an update? Do you have any pictures on 
that, or can you describe it perhaps? Oh, I have one right 
here.
    General Dunwoody: Senator, that has primarily been an intra 
sealift asset, moving stuff around inside the theater. The Army 
currently does have two leased. They plan and are committed to 
funding the start of a new one, a research, development, test, 
and evaluation (RDT&E) vessel, in fiscal year 2005, and they 
are planning to develop a program objective memorandum (POM) 
for five of them in fiscal year 2006 to 2009.
    Their objective is to get 12 of these vessels on hand 
through fiscal year 2011.
    Senator Kennedy. I guess it says it is currently on a 
scheduled 6- to 12-month deployment in support of operations. 
You have been testing these different types of hulls, have you?
    General Dunwoody. This is not a USTRANSCOM asset, Senator. 
This is an Army asset.
    Senator Kennedy. What is their range?
    General Dunwoody. I would have to take that question for 
the record, sir. That is not one of ours.
    [The information referred to follows:]

    TSV block I traveling at 36 knots will have a range of 1,250 
nautical miles with a payload of 754 short tons (ST) and 354 
passengers.
    TSV block II traveling at 40 knots will have a range of 2,500 
nautical miles with a payload of 1,050 ST and 354 passengers.
    TSV block III traveling at 45 knots will have a range of 2,500 
nautical miles with a payload of 1,250 ST and 354 passengers.
    Blocks I, II, and II vessels traveling at 40 knots have an 
unrefueled range requirement of 4,700 nautical miles unloaded with no 
passengers.

    General Handy. Senator, it might be helpful to know one of 
the main ships they have leased is the Westpac Express. It is a 
ferry, typically used in the Australian trade. They are 
aluminum-hulled. They can hold about a battalion's worth of 
equipment. They are intra-theater, as Ann said, generally small 
sea states. They are aluminum-hulled; so their defensive 
capabilities are somewhat limited. They are an idea that the 
Army has to move intra-coastal and small size movements of 
equipment and perhaps people.
    Admiral Brewer. Let me jump in there, Senator.
    General Handy. Our sealift side of it can tell you some of 
the other graceful things about it.
    Senator Kennedy. Yes, I was wondering why, when I was 
preparing for this, it was the Army that was in charge of this.
    Senator Talent. It is taking jointness maybe a little bit 
too far.
    Senator Kennedy. Then it was all explained to me and it 
sounded very good.
    Admiral Brewer. That has engendered a lot of conversation, 
needless to say, between the Army and the Navy. Senator, the 
high-speed vessel is new technology, runs at about 35 to 40 
knots, carries--the Westpac Express, by the way, is leased by 
the Marine Corps for the western Pacific--900 marines and 350 
short tons, and routinely makes voyages of 1,000 miles or more. 
In fact, they just went from Okinawa down to the Philippines.
    Very good up to a certain point. They can be somewhat 
economical as compared to airlift up to a certain point. I 
think from the standpoint of experimentation, the Army is 
looking at it from the standpoint of intra-theater. The Navy 
has looked at it from the standpoint of certain warfighting 
capabilities as well, maybe as a bridge towards the Littoral 
Combat Ship (LCS), in terms of experimenting with that type of 
hull form.
    We just leased the Swift, which is a mine warfare 
countermeasures ship, after the Inchon had her fire, and that 
particular vessel right now is doing mine warfare things as 
well as experiments for the Marine Corps.
    It is really kind of leading-edge prototype technology.
    Senator Kennedy. As I see, it has been leasing an 
Australian hull, too?
    Admiral Brewer. There are some ship builders in the United 
States that are basically partnering with the ship builders in 
Australia, so that perhaps in the future they will be U.S.-
built.
    Senator Kennedy. Can you use it in the Atlantic as well?
    Admiral Brewer. Yes, sir. The Swift went from Australia to 
the Indian Ocean in record time. She has to carry a lot of gas. 
She went all the way from the Indian Ocean, around the Horn of 
Africa, around the Cape, into the Mediterranean Sea, and then 
from the Mediterranean over to the Atlantic. She stopped a lot 
for gas. I keep emphasizing that.
    Senator Kennedy. Okay. Just a couple more, Mr. Chairman.
    Senator Talent. Take your time.
    Senator Kennedy. Admiral Brewer, what are your current 
plans for recapitalizing on the Ready Reserve Force (RRF)? That 
has been one of the great successes--the Ready Reserve. We 
followed that very closely in this subcommittee. Those ships 
have done an extraordinary job. At some time in the somewhat 
near future we have to be thinking about those again. I would 
be interested in what you might be able to tell us about it.
    Admiral Brewer. Right now the RRF, of course, is managed by 
the Maritime Administration (MARAD). What we are looking at is 
capabilities within it. Clearly, we do not want any more break-
bulk ships because it takes so long to load those. We have some 
ships that are getting up into age 50 years, and clearly we 
will retire them.
    But as General Handy said, the shape of the RRF will be 
determined mainly by the MCS. MARAD clearly has some plans on 
the table, but clearly we need to know what the new 
requirements will be for the WD versus to swiftly defeat the 
effort. We need to know what the war plans will require.
    But we clearly know what we do not need. We do not need any 
more break-bulk ships. During the war it would take up to 2 
weeks to upload a break-bulk ship and another 2 weeks in 
theater, as compared to a large, medium speed roll-on/roll-off 
(LMSR), which is almost three times the size of a lot of these 
ships, where we could actually upload a LMSR in 3 to 4 days and 
download a LMSR in 2 or fewer days.
    So therein from a requirements perspective shows you what 
we do not need. We know those things we do not need. Now, what 
we will need in the future we are going to have to determine.
    Senator Kennedy. Anything that you want to say with regards 
to the Gulf War that helped you figure that out, or any 
conclusions you have reached?
    General Dunwoody. Well, first of all, we literally moved an 
Operation Desert Storm-sized force in almost half the time. 
That is the first thing. Speed is clearly going to be something 
that we will be looking at in terms of future capability. For 
example, during the Gulf War the average speed of our vessels--
because we had to charter so many off the market--was 13 knots, 
versus 17 knots during this particular war. That means we 
closed in 5 days less, with a heck of a lot more capacity.
    The RRF ships were in much better condition because 
Congress gave us the money to help basically maintain them 
better. We had a 98 percent availability rate within the RRF, 
and of course the RRF was that big force that sat off the coast 
of Turkey and delivered the 4th Infantry Division in such an 
expeditious manner.
    From that perspective, the LMSR was the Cadillac, if you 
will, of this particular war. From that perspective, we are 
very happy with what we had. But clearly, we do not know what 
the future will hold. As warfighters, we already know you do 
not fight the last war. So the MCS is going to be critical.
    Senator Kennedy. It is enormously important for many 
reasons, the last of which you certainly emphasized. We are 
going to be looking at the base realignment and closure (BRAC), 
too. They are going to have criteria, and they are going to 
look at what they need and looking about in terms of making 
judgments about many of these items, too. This is going to be 
an important time in the next couple of years, making decisions 
on these items.
    Thank you, Mr. Chairman.
    Senator Talent. I thank Senator Kennedy for his questions 
and just encourage him, if he has any more, to feel free to 
ask. This is our foray into reviewing lift, and it is one of 
the important responsibilities of this subcommittee.
    I really should have begun, not just by welcoming you all, 
but by congratulating your command on the tremendous 
achievements in OIF. Anybody who looked at what happened in 
Operation Desert Storm and assumed that the United States would 
not learn from that lesson and be able to deliver more and 
faster in the next engagement made a big mistake. I am grateful 
to you, and also for the jointness that you do represent.
    I was going to ask Admiral Brewer about the Maritime 
Prepositioning Force--Future (MPF(F)) and the MPF--Aviation 
(MPF(A)). According to the shipbuilding plan submitted with the 
budget request, the first MPF(F) ship is to be started with 
research and development funds in fiscal year 2006, with two 
follow-on ships funded in the National Defense Sealift Fund in 
fiscal year 2009. Fiscal year 2009 also includes funding for 
the first MPF(A) ship.
    There has been a lot of discussion that these ships will 
contribute greatly to the sea basing concept that is part of 
the Sea Power 21 vision. Indeed, I do not know how we can do 
the seabasing concept without these vessels. Is your command as 
the end item user participating in the requirements process for 
these ships?
    Admiral Brewer. Yes, sir. We have been intimately involved 
from the Center of Naval Analysis, the initial studies, to the 
analysis of alternatives. We have been intimately involved in 
it. We already operate the Maritime Prepositioning Ships (MPS), 
which basically once they offload the marines, 11 of which 
during OIF went over to common user, to General Handy, we could 
use those ships as well.
    MPF(F) is clearly still in the developmental stage. But 
what we have done is we have introduced through prototyping 
technology we feel would be beneficial to that particular ship, 
such as selective discharge systems. If you go to Wal-Mart, you 
see stuff scanned as it goes through the register. Why not have 
that same kind of technology when you are moving containers on 
a ship?
    In other words, a battalion commander can send a digital 
signal from the beach saying: ``I want X container delivered to 
me yesterday.'' Well, if he says that then this automatic 
system goes down, scans, finds that container, pulls it out, 
and puts it up on deck, and an aircraft picks it off of an 
MPF(F)-type ship and moves it to the objective.
    If he says, ``I want it maybe in a day or so,'' then it 
goes over the side into a high-speed connector or some kind of 
vessel and then goes into some port area. That is the kind of 
technology that we are encouraging be inserted into MPF(F) from 
our perspective.
    Of course, more importantly, the Chief of Naval Operations 
(CNO) will have to depend on civilian mariners to man these 
ships. We are the force, the Military Sealift Command, that 
will hire the mariners to man this particular ship, because we 
really need sailors and marines shooting in the combat role, 
wherein the mariners can fulfil the support role on these 
vessels.
    Senator Talent. With this new technology, the benefit 
sounds like you will be able to keep track of your inventory 
just like Wal-Mart does as well?
    Admiral Brewer. Yes, sir, and that feeds into what General 
Handy needs to have in terms of in-transit visibility (ITV), as 
well as watching the consumption of this. Now, I do not want to 
get too far into Ann Dunwoody's business, but when that 
container hits the beach and the foxhole consumes it, that 
order automatically comes back through the DPO process and gets 
ordered either from the continental United States (CONUS) or 
from some theater asset that can deliver the goods to that 
particular warfighter.
    Senator Talent. Do we have a network architecture adequate 
to support that kind of keeping track of inventory real-time?
    General Handy. We are far closer to that vision today than 
we have ever been. Just to give you an example, on the air side 
we have been running in Afghanistan and Iraq at the 95 to 98 
percent visibility of things moving by air, and that is not 
just knowing that a pallet is moving; it is everything on the 
pallet right down to what is in the pallet.
    We also have the same percent of visibility when we move 
things by air intra-theater. When General Dunwoody moves them, 
with Admiral Brewer's help, by sealift, our IT systems give us 
that kind of clarity of containers and items in the container 
all the way from the time we stow a ship until we unload a 
ship.
    The challenge for us as the DPO becomes from the airport 
into the ground system and from the seaport into the ground 
system to that forward point of consumption is creating the IT 
systems, expanding and extending the IT systems so that we do 
what Dave is talking about: When items are consumed at that 
point of consumption, like a Wal-Mart or some other store, we 
know that and the system automatically will report back the 
consumption and the supply chain supports it.
    Senator Talent. So you know right away, yes.
    General Handy. That last tactical mile is the challenge 
that we are undertaking with the Deployment Distribution 
Operations Center (DDOC) in-theater today.
    Senator Talent. It would relieve pressure on how much you 
have to preposition if you had that kind of intelligence and 
can resupply quicker.
    Admiral, MPF(A). It is my understanding that MPF(F) is 
going to preposition material for ground forces. Should I just 
think of MPF(A) as doing the same thing for supporting aviation 
assets? It is not as well defined in my mind. Could you 
elaborate?
    Admiral Brewer. No, sir, it is not. I really have not had 
that much visibility in it. We have not really been that much 
involved on the A side, but we have been involved on the F 
side.
    Senator Talent. Okay. Three years ago, General Robertson 
testified that the Maritime Security Program should be 
reauthorized and that annual payment for participating vessels 
should be raised. This was done in the defense bill last year, 
beginning effective in fiscal year 2006. The program will also 
expand from 47 to 60 participating ships.
    Now, I know the program comes under the Maritime 
Administration in the Department of Transportation, but, 
Admiral, I would be interested in your views on it. How 
important is that program to you in augmenting sealift 
capability?
    Admiral Brewer. Oh, it is extremely important. We cannot 
exist without it. As I said before, the RRF was extremely 
critical to everything that we did. The activation of these 
particular ships has been extremely critical in terms of 
readiness. But more importantly--and I want to divert here for 
a minute--ships do not run themselves; mariners run them. The 
Maritime Security Program is providing us with a U.S. flag 
fleet that will provide us with the mariners to man these 
particular ships.
    I have to commend some of the people sitting behind me who 
represent the maritime trades, departments, and unions, because 
without them we could not have fought this war. That is 
extremely important.
    Senator Talent. It is an amazing civilian-military synergy.
    Admiral Brewer. Yes, sir. Without them it does not happen, 
period.
    Senator Talent. I do not know if there is a parallel for it 
in the history of warfare. It is a tremendous synergy. I am 
glad you said that for the record.
    Admiral Brewer. Yes, sir.
    Senator Talent. General Dunwoody, let me ask you about 
railcars for a second. One of the findings of the MRS-05 was 
that rail flatcars need to be augmented by commercial means. 
Your written statement identifies a shortage of 2,000 tiedown 
flatcars if you are going to be able to meet the ship loading 
schedules.
    What is your assessment of the adequacy of our rail 
delivery system as applies to the present NMS? How big on a 
scale of 1 to 10 is this as a concern for you, and what are we 
doing about it?
    General Dunwoody. Mr. Chairman, I think, like the other 
commodities, this needs to be revalidated in the MCS, both 
railcars, ammo cars, sealift, and airlift capability. What we 
found using the MRS-05 study was that we took measures to 
mitigate this projected shortfall for railcars. What we found 
was by controlling and consolidating the requirements for 
railcars in our operations center, we were able to prioritize 
and meet the demands of the customer. We experienced no 
shortfalls during OIF and Operation Enduring Freedom (OEF) for 
railcars.
    I think again it goes back to revalidating that 
requirement. Prior to us consolidating, all the installations 
put demands on the system and they were not synchronized. With 
everyone deploying at one time it was not a matter of 
availability; it was a matter of prioritizing what we had.
    Senator Talent. Would you say the same thing about 
containerization, that we need to revalidate those needs as 
well, because MRS-05 concluded that that capacity was 
inadequate. So should we conclude, in view of our suspicion 
that that study has understated our requirements, that maybe 
that need is even greater?
    General Dunwoody. Absolutely, Mr. Chairman, and I would say 
that again to mitigate that we let a contract with one of the 
largest container leasing companies to provide assured access 
to ammo containers and we were able to lease over 5,000 ammo 
containers and again experienced no shortfall during OIF and 
OEF.
    Senator Talent. A couple more questions. This is for all of 
you. Your written statement mentioned several exercises 
conducted to improve our ability to deploy and sustain forces, 
including Exercise Turbo, Intermodal Surge, Turbo Containerized 
Ammunition Distribution System, and Joint Logistics Over the 
Shore (JLOTS). Expound for us and for the record, if you will, 
a little bit about the lessons learned from the conduct of 
these exercises and the initiatives your commands are taking as 
a result?
    General Handy, you want to start, but I would ask all of 
you to comment on that.
    General Handy. Certainly, sir. Certainly from a USTRANSCOM 
perspective these exercises prove a lot of facets of our 
ability to be very flexible, dynamic, and highly capable in 
supporting the warfighter. There are perhaps in my mind two 
singular thrusts that are very important, and my teammates here 
can expound, as you point out: greater containerization. In 
other words break-bulk, as Dave said, makes no sense at all. So 
greater containerization, and to the extent we containerize 
cargo and move it from ship to shore in the case of sealift is 
clearly a major part of these exercises.
    JLOTS for its contribution proves that, in the case where 
you do not have an adequate port facility, you can go from ship 
over the shore in to support the warfighter. We need to 
continue to improve and demonstrate that rather significant 
capability.
    Sort of a subordinate piece of that is ammo 
containerization, getting ammo out of break-bulk modes and 
ammunition and ammunition stocks into containers, which is 
another aspect of these exercises and one that we have made 
tremendous progress. If you, having said that, look back at 
Operation Desert Shield/Desert Storm as perhaps our last 
benchmark and then how we operate today, there is a dramatic 
change, as David pointed out, in just process and procedure and 
containerization and how we do things, just simply stated.
    These exercises in the interim have helped us prove process 
and procedures so that the warfighter knows and that our 
components, our executive agents, come forth with the moneys to 
support us when we need things.
    Having said that from my perspective, I will turn it over 
to these two to add their perspectives.
    Admiral Brewer. One of the things that happens is it gives 
you the opportunity to make the next technological leap or the 
next tactical or strategic leap. For example, JLOTS: one of the 
things we learned is the offshore petroleum distribution system 
is clearly dated, it is ineffective, it is too close to the 
shore, and it is too vulnerable. These are the ships that tilt, 
if you will, and try to push gas ashore.
    Fuel is extremely important. We have delivered over one 
billion gallons of fuel so far during the global war on 
terrorism to support Afghanistan and Iraq. So fuel is extremely 
important. If you get into a situation where you cannot push 
gas ashore, either through the ports or offshore, you are in 
trouble.
    What we have done as a result of these exercises is come up 
with a different concept for doing that where we actually have 
a ship that comes in that is a pumping station, where any 
commercial tanker can pull up to it, hook up, and pump gas into 
it and through it in to the shore from a much greater distance 
and it less vulnerable. By the way, we can pick up and move in 
case that area becomes vulnerable.
    That is a classic example of the kind of lessons learned, 
if you will, and things that we learn during these particular 
exercises.
    Senator Talent. It would seem to be an obvious target for 
some kind of asymmetrical threat----
    Admiral Brewer. Absolutely.
    Senator Talent. If you have a huge platform and it is your 
only means of transferring and getting fuel ashore, it would be 
an obvious target.
    Admiral Brewer. Yes, sir. It takes hours and sometimes days 
to even set it up. I have watched it happen. You sit there and 
you push the ``this is nuts'' button and say we need something 
different. That is what these exercises do for us.
    Senator Talent. How did you put that, Admiral? You push the 
``this is nuts'' button.
    Admiral Brewer. Do not put that in the record, sir. 
[Laughter.]
    Senator Talent. We can leave it out of the record, but we 
will remember it. You described something I do three or four 
times a day, push the ``this is nuts'' button. That is great.
    Go ahead.
    Admiral Brewer. Those are the kinds of things. Then, in the 
turbo activations and things of that sort, of course, we 
exercise our ships and find out how fast we can get them ready. 
For example, we determined that, even though our ships are in a 
reduced operating status of what we call 4 days, they actually 
activated within 3.8, 3.5 days. So why? Because we exercised 
them. We did these turbo activations. Our crews were ready. We 
brought the unions in very early in the war. They knew exactly 
what the requirements were, and the people showed up and we 
were ready to go.
    Senator Talent. Thank you. That was very instructive. It 
seems to me what you are doing would bear on requirements in 
what we do with the new LCS, because the more of your logistics 
that you have to have close to that shore and the more 
vulnerable it is, the more we are going to have to task that 
new vessel. By moving that further out and making it less 
vulnerable, you have made the job easier for that ship as well.
    Admiral Brewer. Yes, sir.
    Senator Talent. It is again the whole jointness and 
connectivity of these exercises, which you all see in logistics 
minute by minute. It is fascinating and a little frightening 
also.
    Yes, General, do you have a comment?
    General Dunwoody. Mr. Chairman, I just would like to add a 
couple things. Using Operation Desert Storm as the benchmark, 
as General Handy mentioned, some of the huge success stories 
were in process changes and this time around delivering force 
packages and capabilities to the warfighter versus stuff, which 
we did in Operation Desert Storm.
    For an example, one combat arms battalion during Operation 
Desert Storm normally flowed on seven vessels and closed in a 
period from the first vessel hitting Southwest Asia (SWA) to 
the last 26 days. That is one battalion. A combat service 
support (CSS) battalion took 26 vessels normally and flowed and 
closed in a period of 36 days. If you can imagine the 
warfighter receiving this stuff on that side, if you recall 
from Operation Desert Storm, large tactical assembly areas, a 
large footprint, and a long time to reception, staging, onward 
movement, and integration (RSO&I), link up capability.
    This time, the entire 101st Airborne Division--and I will 
use them as an example of an investment that we put in our 
LMSRs--was loaded by force packages, brigade combat teams, 
rolling off the vessels, flowed in five vessels and closed in a 
period of 12 days. As Admiral Brewer said, now you are 
delivering capability, reducing that RSO&I, reducing the 
footprint for the warfighter, keeping that on this side of the 
ocean, and flowing equipment.
    Right on top of that would be the container ITV piece. As 
you recall from Operation Desert Storm, again a large footprint 
in the area of responsibility, 40,000 containers there stacked, 
20,000 we sent back because we did not know what was in them. 
Now, with ITV only 3,500 containers at one time stacked up in 
the port. We have been able to track those containers. Again, 
keeping the footprint down or keeping it on this side, because 
we have instituted new business rules, frustrating cargo on 
this side of the ocean without knowing the content data or 
using the systems General Handy has talked about that we 
developed for ITV.
    Again, giving confidence to the warfighter. Two huge 
changes that we had since Operation Desert Storm are the 
ability to save money by identifying containers and sustainment 
on vessels versus having to fly it over there which is much 
more costly.
    Senator Talent. Any challenges that these exercises 
revealed for you, General? The number one challenge that you 
emerged thinking you want to tackle?
    General Dunwoody. Well, I think, Mr. Chairman, the huge 
success story is the designation of USTRANSCOM as the 
distribution process owner. In each one of these exercises, we 
have got to take advantage of how do we now implement the new 
rules, regulations, rules of engagement, as a combatant 
commander that takes on this new role.
    You have to leverage each one of these exercises. Otherwise 
it is real easy to do the exercise just like we did last year 
and not try to make a difference and implement new rules of 
engagement for improving our processes.
    Senator Talent. I think I just have a couple more. In fact, 
let us get to vulnerability a little bit. First of all, 
following up on something Senator Kennedy asked, he was 
inquiring about C-5 with you, General Handy. Certainly I agree 
that we need to as expeditiously as we can figure out what that 
mix needs to be.
    Now, he made the point to you, which I think in a general 
sense is very valid, that how do we know how many C-17s we are 
going to need until we know what we are going to do with the C-
5s, and, therefore, it makes it difficult because we do have to 
make decisions in terms of advanced procurement for a new 
multiyear.
    But we are all pretty much in agreement that whatever the 
end number is with C-17, whether it is only the 222 or whether 
it is 250 or whether it is above that, we need more than we 
have now. That is not something that we expect any further 
analysis to change. I have not talked to anybody who believes 
that.
    So we are looking at at least another 42, perhaps more. But 
whatever we do with C-5, we are going to need to raise the 
requirement at least to 222; would that be your opinion?
    General Handy. It certainly is, Senator. I would be remiss 
in this line of questioning, even to include that of Senator 
Kennedy, as we focus on the cost differences between the two 
programs, not to point out, it is the capabilities issue and, 
as we addressed, what is the requirement that you have to move? 
In that requirement there is outsize, oversize, bulk, and even 
small packages and people.
    If you look at that requirement, the issue we face is which 
aircraft has the capability to do the things you want done, and 
that becomes the critical part of the decision when you say, 
``How many do we ultimately need?'' The position we are in 
right now is we need every C-17 and C-5 that we can get our 
hands on because the requirement far outweighs our ability to 
get the job done.
    As we refine the MCS and we look at that requirement, then 
with more clarity we can determine not only what the number of 
C-17s would be, but what would be the number of modified C-5s, 
because, as the combatant commander, each of these weapons 
systems brings unique capabilities. The C-5 has extraordinary 
capability to lift huge volumes of cargo to major hubs forward 
in a theater of operations, but the C-17, while it cannot haul 
as much, is a capability that gets large volumes of cargo 
directly into the fight in a high-threat environment, in the 
dirt, and in the areas with small strips and less improved 
runways.
    Each of those are capabilities that we need and they are 
not as many people outside those of us who are involved in this 
debate realize competing capabilities; they are capabilities 
that each in their own measure you need.
    Senator Talent. I wanted to establish that because, 
although obviously there are some missions where you could use 
either aircraft, it depends in part on certain assumptions you 
make: how likely is it that we are going to have long runways, 
strong ramps, and places where a C-5 can go? It would be good, 
I think, to get this mix and to make whatever assumptions we 
are going to make and to look at them and then to figure out 
how effective the C-5A platform with the engine modifications 
is going to be and how much maintenance it is going to take.
    We ought to try to pin this down. I take it you agree with 
that? You are not disagreeing with that, is that correct?
    General Handy. No, sir. I totally agree.
    Senator Talent. Let me ask you a little bit also about a 
threat to C-17 and, in fact potentially even to other kinds of 
airliners from manportable air defense systems (MANPADS), the 
new laser system to counter that threat. What is the status of 
that? What are we doing to protect our air mobility assets? Are 
these programs being executed as quickly as you think they can 
be? Because it strikes me that this is a threat that we need to 
deal with. These MANPADS are all over the place.
    As I understand it, this laser system is pretty effective 
in countering them. Tell me where we are.
    General Handy. I am certain you must be referring to our 
Large Aircraft Infrared Countermeasures (LAIRCM) system. It 
indeed is a laser capability. Right now we have it on what we 
call a lite version; that is one laser mounted in the tail of 
our C-17 aircraft. That is the only aircraft we have them on 
now.
    It is designed to take care of a rear-aspect shot for the 
most part. That tends to be the area that we see the attacks 
taking place. Both the C-5 and the C-17 and, in fact, the DHL 
airliner that have been hit by MANPADS out of Baghdad were both 
reported to be from a rear-aspect, meaning shot from the ground 
as the aircraft passed over. So the missile approaches the 
aircraft from behind.
    Senator Talent. That would make sense. By the time they 
could get ready and shoot, you would be going away. But you 
need more than just one, do you not?
    General Handy. Absolutely.
    Senator Talent. To be able to fully protect the aircraft?
    General Handy. That is where I am headed; the full LAIRCM 
is in fact the tail and one on each side, roughly where the 
crew door is on a C-17 or the crew door on a C-5. It takes 
three systems to give you that full aspect capability. Even 
then, technically there could be some blind spots, depending 
upon the angle of bank of an aircraft or climb or descent.
    Having said that, at least getting the LAIRCM Lite on our 
C-17s gives us the capability with a system that has proven in 
tests to be incredibly accurate. What the system does is 
essentially send a laser beam out to the detected missile 
coming at you, confuse it, and send it off.
    Senator Talent. A jammer, in essence?
    General Handy. Exactly, essentially that is what it does, 
without getting into the technical aspects.
    Senator Talent. Are you telling me that the intention would 
be to try and equip as many as possible with the one site and 
then go on and add because you feel that gives you pretty good 
protection?
    General Handy. Based upon our experiences and the lessons 
in Iraq, we broke from an original program of a few lite and 
then going to a full-up LAIRCM modification on the C-17s and C-
130s to a lite modification, which will give us that one-ball, 
one-laser capability on the tail of C-17s, as quickly as we 
possibly can to protect us from the--it is no longer an 
emerging threat.
    Senator Talent. It is a real threat.
    General Handy. It is a current, alive and well threat, I am 
afraid.
    Senator Talent. The partial success may just encourage more 
of it in the future.
    General Handy. Yes, sir.
    Senator Talent. Well, that is all I have. I do want to 
thank you all again for giving us so much of your time. The 
hearing went on a little bit longer than I wanted, but I 
thought we covered all the ground. We may have some--in fact 
will have--at least a few more questions for the record.
    But thank you all again for your service. Thanks to those 
who serve with you and under you, and thanks for your time 
today. We appreciate it.
    The subcommittee is adjourned.
    [Questions for the record with answers supplied follow:]
            Questions Submitted by Senator Edward M. Kennedy
                      strategic airlift capability
    1. Senator Kennedy. General Handy, during the hearing we discussed 
the potential for achieving a strategic airlift goal of 57.4 to 60 MTM/
D. This is the goal that your quick-look assessment of the MRS-05 
indicated would probably be the new moderate risk goal. I asked you 
about what effect on meeting this MTM/D goal would be if we were to buy 
222 C-17 aircraft (as your report suggested) and retaining 112 of the 
C-5 aircraft in inventory. You indicated that you thought this force 
structure would exceed the MTM/D goal.
    Please provide a more precise estimate of the capability of the 
strategic airlift fleet under the following conditions:

          A. buying 222 C-17 aircraft and retaining 112 C-5 aircraft, 
        with all C-5 aircraft upgraded under the C-5 RERP;
          B. buying 222 C-17 aircraft and retaining 112 C-5 aircraft, 
        with none of the C-5 aircraft upgraded under the RERP;
          C. buying 222 C-17 aircraft and retaining 112 C-5 aircraft, 
        with only the C-5B aircraft upgraded under the RERP; and
          D. buying 222 C-17 aircraft and retaining only the C-5B 
        aircraft, with those C-5B aircraft upgraded under the RERP.

    General Handy.

          A. The organic airlift capacity of a C-17 fleet of 222 and a 
        C-5 fleet of 112, with all the C-5s upgraded would be 37.2 MTM/
        D equating to a total MTM/D capacity (including Civil Reserve 
        Air Fleet (CRAF) contribution of 20.5 MTM/D) of 57.7 MTM/D.
          B. The organic airlift capacity of a C-17 fleet of 222 and a 
        C-5 fleet of 112, with none of the C-5s upgraded would be 34.4 
        MTM/D equating to a total MTM/D capacity (including CRAF 
        contribution of 20.5 MTM/D) of 54.9 MTM/D.
          C. The organic airlift capacity of a C-17 fleet of 222 and a 
        C-5 fleet of 112, with only the C-5Bs upgraded would be 35.2 
        MTM/D equating to a total MTM/D capacity (including CRAF 
        contribution of 20.5 MTM/D) of 55.7 MTM/D. The preceding 
        numbers assume a fleet of 52 RERPed C-5s and 60 un-RERPed C-5s. 
        The 2 extra C-5s (there are only 50 B model aircraft) are due 
        to the assumption that the 2 C-5C models would be kept and 
        modified due to the unique and important capability they 
        provide.
          D. The organic airlift capacity of a C-17 fleet of 222 and a 
        C-5 fleet of 52, with all the C-5s upgraded would be 29.7 MTM/D 
        equating to a total MTM/D capacity (including CRAF contribution 
        of 20.5 MTM/D) of 50.2 MTM/D. The preceding numbers assume a 
        fleet of 52 RERPed C-5s. The 2 extra C-5s (there are only 50 B 
        model aircraft) are due to the assumption that the 2 C-5C 
        models would be kept and modified due to the unique and 
        important capability they provide.

                            c-5 retirements
    2. Senator Kennedy. General Handy, the Air Force plans to retire 14 
of the current fleet of 76 C-5A aircraft. The Air Force announced this 
intention when announcing the master airlift re-stationing program that 
was required when the C-17 program was expanded. Can you specify what 
criteria the Air Mobility Command is using to decide which C-5A 
aircraft will be retired?
    General Handy. The Air Force, along with the C-5 System Program 
Office (SP) and Air Mobility Command (AMC), analyzed structural repair 
data, maintenance records, crash damage information and readiness data 
to determine which 14 C-5As to retire from the inventory. Final 
determination of specific aircraft was based upon age and average 
maintenance man-hours expended. The first 11 C-5SAs selected were the 
first production aircraft. These aircraft were manufactured using 
different processes than the remaining C-5As, resulting in unique 
structural differs, requiring separate spares, and increased days in 
depot. The remaining three aircraft selected had accrued the most 
maintenance man-hours per year from 1997-2001.

                         intra-theater airlift
    3. Senator Kennedy. General Handy, the Army has announced an 
intention to buy C-27 aircraft as part of the Comanche helicopter 
cancellation. While this aircraft would not provide as much intra-
theater lift capability as the C-130 aircraft, it would provide some 
capability. How would your plans for providing intra-theater support to 
combatant commanders include the contribution of any potential force of 
Army C-27 aircraft?
    General Handy. The Army has not announced a decision on a specific 
aircraft purchase at this time; although, USTRANSCOM understands the 
Army is looking to replace its 44 C-23 aircraft with a similar 
capability. The C-23 aircraft are used by the Army as a service organic 
mobility resource and are not presently tasked by USTRANSCOM. Should 
the Army acquire a replacement aircraft similar to the C-23, USTRANSCOM 
has no current plans to treat this new aircraft in a different manner.

                      force structure projections
    4. Senator Kennedy. General Handy, your MCS will be important for 
determining USTRANSCOM's future. The DOD is currently establishing its 
best estimate of force structure requirements for the next 25 years as 
part of the analysis supporting a possible BRAC process for fiscal year 
2005. Will the Department have the benefits of any results from your 
MCS analysis as it establishes the assumed force structure that will 
drive the BRAC process?
    General Handy. The MCS is scheduled for completion in March 2005. 
Analysis from that study will be available to inform the BRAC process.

    [Whereupon, at 3:18 p.m., the subcommittee adjourned.]

                                 
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